Germany and France have long been defined as the engine of Europe. While France has its own problems, in Germany everything more important is currently put on the back burner due to the upcoming elections. Is the real conservative Friedrich Merz capable of bringing the fresh air that the Federal Republic needs, writes the European Newsroom - a platform for cooperation between 23 European news agencies, including BTA.
In exactly one month, on February 23, Germany will elect a new parliament. But while the largest economy in the EU is busy with the election race, there seems to be no room for truly urgent European issues. Depending on the outcome of the vote, complex and lengthy coalition negotiations could follow - which could lead to increased political paralysis and distract Berlin from the work of the European Union.
The fall of the government in November was due to clashes and disputes between Chancellor Olaf Scholz and his coalition partners over which was the right path to economic recovery. The previous governing majority consisted of the Social Democratic Party of Germany, the Greens and the liberals from the Free Democratic Party (FDP).
THE ECONOMY, OLAF
In 2024, Germany recorded negative economic growth for the second year in a row, according to official statistics, with little hope of a quick recovery in the background, and at a time when this traditional European power is mired in a political crisis. The gross domestic product of the largest economy on the Old Continent fell by 0.2% last year, according to the forecast data of the Federal Statistical Office (Destatis), with 0.3% for 2023.
This puts Germany in the unusual position of being at the bottom of the economic growth queue - with the European Commission predicting growth for the entire eurozone of 0.8%, well above German indicators.
Germany's structural problems are multifaceted and are related to its overall economic positioning in the EU.
"Compared to other places in the world, the burden on companies such as taxes, bureaucracy and energy costs is high, the renewal of digital, energy and transport infrastructure is taking place at a slower than necessary pace, and the shortage of qualified labor is more pronounced," believes Timo Wollmershäuser, director of "Forecasts" at the German Institute for Economic Research ("Ifo", Ifo), summarizing the picture as of mid-January.
WHO WILL GOVERN GERMANY
After February 23, Germany will most likely be governed by a coalition again, but a return to the so-called traffic light coalition between the SPD, FDP and the Greens is unlikely. Recharging the German economy will be one of the main tasks of any new government, which - judging by current opinion polls - could be formed by the conservative Christian Democratic/Christian Social Union (CDU/CSU) bloc.
The results of public opinion polls five weeks before election day seem to already paint a fairly clear picture: the CDU and its Bavarian sister party the CSU are leading in the polls of the three leading agencies with support of 29-31%, followed by the far-right "Alternative for Germany" with 20-21%.
Scholz's SPD is only the third political force according to these polls with 16-18%, while the Greens' electoral share is between 13 and 14%. The FDP currently enjoys the sympathy of around 4-5% of those eligible to vote - which means that it may not cross the 5% threshold for entering the Bundestag. The left-wing formation "The Left" (3-4%) and the new left-conservative alliance "Sarah Wagenknecht Alliance" (4-7%) may also remain below the line.
When asked who they would like as their chancellor, German voters equally give a clear preference to the CDU/CSU candidate Friedrich Merz and the Greens' Robert Habeck (both with 23%) over Scholz's candidacy (17%). The German chancellor is not directly elected.
The most likely outcome is a coalition between the CDU/CSU and the SPD. For now, all parties have ruled out forming a joint government with the AfD.
WHAT IS AT STAKE FOR GERMANY AND EUROPE
Whoever comes to power in Berlin will have to deal with a huge list of tasks. In addition to rebuilding the economy and the country's crumbling infrastructure, Germans want lower energy prices, and Germany must also reduce its dependence on fossil fuels. Another question is whether the new government would subsidize the construction of gas-fired power plants to act as backup capacity in the event of a shortage of renewable energy.
The potential new chancellor, Merz, is expected to change course on several key policy issues - environmentalists fear a retreat. Merz, for example, is skeptical of the energy transition to the production of so-called green steel, and his party has already promised to return agricultural fuel subsidies. But while he recently said he "regrets" the decision to abandon nuclear power, it may now be too late to reverse course on this issue as well. Merz stressed that he remains committed to Germany's path towards an energy transition and a shift away from fossil fuels. WHAT MERTZ WANTS The conservative leader considers himself better placed to negotiate with US President Donald Trump than Scholz, who is more critical of the new government overseas - especially because of the recent interventions by Trump ally Elon Musk in the German election race. Better communication with Trump and his team, which the Christian Democrat claims to be capable of leading, could prove to be a cornerstone in efforts to defuse the conflict if the Republican decides to impose new tariffs on German exports. Germany fears it could find itself on the front lines of a new US-European trade war that would hit the Federal Republic's export-oriented economy hard.
"As long as EU members remain united, they will be respected around the world, including by the US. If we are divided, no one will take us seriously," said CDU leader Friedrich Merz.
At a meeting of the European People's Party (EPP) in Berlin on January 18, he added in a comment on Trump's inauguration on Monday that it was an event that would give a boost to Europe's "efforts for unification and unity".
Trump will expect Germany - and the EU - to position itself more clearly against China. The new leadership in Berlin will have to find a way to respond to this and other demands from Washington.
Merz stressed that Germany and Europe must play a leadership role. In his view, it is crucial to pass a trade agreement with several South American countries (MERCOSUR), he said yesterday.
European governments should also increase their cooperation on the purchase of military equipment. "There are many opportunities before us Europeans that we are not taking advantage of", Merz added. Putting the German armed forces in good shape after years of cuts to their funding is another task facing the new government.
While Scholz's government has been torn by internal contradictions over how much to help Ukraine, Merz remains a strong supporter of increasing military aid to the embattled eastern European country.
He accused Scholz of political maneuvering for election purposes for his refusal to approve military supplies to Kiev worth about 3 billion euros. Merz - and Scholz's former coalition partners - are of the opinion that the aid could be treated as an "extraordinary expense" and thus avoid having to resort to taking on new public debt.
However, the chancellor is insisting on drawing down a new loan, which would violate the so-called debt ceiling (or "debt brake", as this restriction is called in Germany). Ukraine is expected to have to wait for a decision until after the elections on February 23.
Merz is also taking a tougher line on migration. At the EPP meeting, he pointed out that other EU countries have come up with a number of new initiatives to improve European rules in this area. "We need stricter measures regarding illegal immigration to Europe," he said. Italy and the Netherlands have made progress on the issue, the conservative politician added. "Germany, unfortunately, is only taking small steps."
In addition to the big issues of migration and defense, other EU members are also looking to Germany for some specific aspects of cooperation:
In Sweden, for example, the conservative government hopes for a better partnership with the Federal Republic on energy. Energy Minister Ebba Busch wants Germany to divide its territory into electricity price zones, which could drastically reduce electricity bills in the Scandinavian country. At the same time, Bush remains highly critical of Berlin's position on nuclear energy.
"It is one thing for Germany not to want nuclear energy, but another thing for it to prevent others from using (European) funding for (this energy sector). That is hypocrisy," Bush said in Brussels in December.
In Europe, Sweden relies heavily on Germany to push its vision of greater austerity. Government and opposition are united in their opposition to any plans for common European borrowing and want the EU budget to be as small as possible. But Sweden is under increasing pressure to follow the example of Finland and Denmark, where other traditionally frugal governments have changed their minds.