As Europe’s most populous country and the proverbial motor of its economy, Germany has an outsized influence on the continent. But as Germans head to the polls on Sunday, its neighbours will be watching the results particularly closely this time, knowing they could prove pivotal for the country’s role in European security, its support for Ukraine, and its sickly economy.
The winner is unlikely to be a surprise: the conservative Christian Democrat CDU-CSU alliance has been ahead in the polls for years, and its leader, Friedrich Merz, is almost certain to become Germany’s next chancellor.
But how that happens is less clear – and the results will determine how much of a free hand Merz will have.
The CDU-CSU will need a coalition partner to secure a parliamentary majority, and Merz could choose either from the socialist SPD of outgoing Chancellor Olaf Scholz, or the Greens, who were also in Scholz’s coalition.
However, if one or all of them underperform, and smaller parties outperform, it could force Merz to ask both the SPD and the Greens to join a three-party coalition.
As Scholz found with his short-lived “traffic light” coalition of the SPD, Greens and liberal FPD, these can be fractious arrangements: his government collapsed in acrimony last November, triggering the early elections.
But there is a bigger worry. Inside the German political classes and among its European allies, there is huge concern that the far right will secure its best ever victory in the country since the fall of the Nazis.
Polls suggest that the far-right Alternative for Germany (AfD) party could secure an unprecedented second place in Sunday’s election, buoyed by increasing discontent over high levels of immigration.
The surge in the AfD has been a defining feature of the election: it currently has around 21 per cent in the polls, just eight points behind the CDU-CSU at 29 per cent.
The AfD has received enthusiastic support from both tech titan and Donald Trump appointee Elon Musk – who last month hosted an interview with the party’s co-leader Alice Weidel – and the US Vice President, JD Vance, who also met Weidel last week in Munich. However, it is unclear how much they will help the party given the sharply rising German distaste for the Trump administration.
Indeed, the question of US electoral meddling has become a campaign theme, with Merz lambasting the Trump team for “interfering quite openly” in the election. Scholz has also clashed directly with Musk: the billionaire called the chancellor “a fool” after his coalition collapsed, while Scholz has attacked Musk for belittling the Holocaust.
Nonetheless, Merz is not above Trump-style populism of his own. Hoping to head off a challenge by the AfD, last month he pushed contentious anti-immigration motions through the Bundestag. He has long been an immigration hawk, severely criticising Merkel’s 2015 “Wir schaffen das”, or “We can do it” pledge to take in a million refugees. He has also promised to toughen rules on obtaining passports while making it easier to strip citizenship from foreign-born Germans who commit serious crimes.
However, last month’s motions were adopted with the AfD’s support, breaching a political firewall on cooperation with the extremist party – and prompting hundreds of thousands to take to the streets in protest.
Merz’s anti-immigration gambit is widely seen as costing him key support – while he is now eight points ahead in the polls, last November his lead was 15 points.
Beyond Berlin, the implications of the elections will be profound. Europe, already navigating economic uncertainty and geopolitical instability, will look to Germany for leadership.
“If ever there were a moment demanding a stable Germany capable of convening and underwriting drastic European action, it is now,” says Jeremy Cliffe, senior fellow at the European Council on Foreign Relations.
He warns that recent polling points to the spectre of another fragile and disunited coalition. “It is, however, still just about possible to glimpse a better outcome. Over the course of the campaign Merz has become more sober and realistic about the dangers of the second Trump term for Germany,” he says.
Merz, 69, would be a very different chancellor to the cautious and unimposing Scholz. He is a staunch supporter of Ukraine and has indicated he would back changes to both German and European Union rules to allow more defence spending.
He has also been upfront about the challenge, saying that Europe must be ready to defend itself without the US. While Merz is a firm Atlanticist, like most European leaders he has been alarmed as Trump has increasingly aligned with Russian President Vladimir Putin’s position over Ukraine, and questioned Nato’s collective defence clause, the foundation for Europe’s security for 75 years.
“We must prepare for the possibility that Donald Trump will no longer uphold Nato’s mutual defence commitment unconditionally,” he told a German broadcaster on Friday.
Merz has even wondered if the US might slide into longer-term authoritarian instability. “This is no longer the America we used to know,” he said after Trump pardoned the January 6 rioters.
Michael Gahler, a CDU MEP and Vice-President of the European Parliament’s Committee on Foreign Affairs, says he has no doubt that Merz would take a firm stance on Ukraine, Nato and defence.
“Unlike Scholz, he would not hesitate,” says Gahler. “He knows that we have to continue to constantly supply weapons to Ukraine. And he knows Europe needs to create a coalition of the willing to then provide supply troops to monitor any peace deal.”
From Brilon in North Rhine-Westphalia, Merz is a fiery figure prone to showing off. A registered pilot and corporate lawyer, he had hoped to win the party crown two decades ago, but he lost a power struggle with Angela Merkel, who would later spend 14 years as chancellor. Merz then left politics for investment banking, where he earned millions, notably working for BlackRock, Deutsche Börse and Swiss railway equipment maker Stadler.
As chancellor, he would also be faced with a massive domestic in-tray. The country is enduring its longest period of stagnation since the Second World War, with anaemic growth, soaring energy costs and declining competitiveness. Once Europe’s economic powerhouse, Germany now faces the daunting task of revitalising its industrial base.
At the heart of the economic debate is Germany’s shifting industrial model. For decades, its prosperity rested on three pillars: cheap Russian gas, robust exports to China and security guarantees from the US. All three foundations have crumbled. Merz’s economic blueprint, dubbed Agenda 2030, promises corporate tax cuts, deregulation and reduced welfare spending to spur investment.
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