The Aakhya Weekly #135 | Fraught German Elections and Sociopolitical Churn
In Focus: Snap Elections & the German Coalition Quagmire
Source: FMT
Germany will elect its federal government on Sunday, February 23rd, 2025. This is considered a pivotal moment in modern Germany, akin to the fall of the Berlin Wall in November 1989. While some argue that comparing the significance of the upcoming elections to German unification is an exaggeration, there is a consensus concerning the paradigm shift Germany will experience, depending on the results announced the day after the German Federal Elections.
As the largest economy in Europe and one the most impactful member states of the European Union, a new German leadership could usher in changes in national policy priorities, impacting the wider energy, security, trade, and fiscal policies across the EU. Moreover, the current elections are being held against the backdrop of the coalition crisis in Germany, when Chancellor Olaf Scholz dismissed the Finance Minister, Christian Lindner of the Free Democratic Party (FDP), on 6th November 2024 over serious disagreements between coalition partners on the economic policy. Interestingly, the coalition government collapsed just a day after the US elections were held, paving the way for a confidence vote in the German Parliament. This was followed by an announcement on the snap elections, way before Chancellor Scholz could complete his term in office, which would have ended in September 2025.
Epicentre of the Political Storm
The outgoing government in Germany was known as a ‘Traffic Light’ coalition, a term coined to describe the various party colours, i.e. the red colours of the left-leaning Sozialdemokratische Partei Deutschlands (Social Democratic Party of Germany- SPD), the Alliance 90/The Greens Party, and the yellow colours of the liberal Freie Demokratische Partei (Free Democratic Party- FDP). Following the end of former Chancellor Angela Merkel’s term in office, the Christlich Demokratische Union Deutschlands (Christian Democratic Union of Germany) or CDU, lost power, despite running a coalition government with their ideological opponents, the SPD, in the form of a ‘Grand Coalition’, for two consecutive terms, from 2013 to 2021. In India, this would be akin to the Bharatiya Janata Party (BJP) and the Indian National Congress joining hands to form a government. While such an outcome in India is unlikely, German political calculus in the past couple of decades focused on reaching compromises, aiming for success through balancing acts, emphasising stability and fiscal prudence in times of crisis. However, there are exceptions, like the recent all-out rift between the priorities of the FDP and the Chancellor Olaf Scholz-led SPD.
After three long years of unyielding policy positions and hard-fought compromises, Chancellor Scholz realised that running a coalition without the SPD’s fiscal interests being met was ineffective. While Chancellor Scholz pushed for higher public spending, Finance Minister Lindner opposed additional borrowing, advocating for spending cuts and fiscal restraint. The resulting trust deficit between coalition partners led to its breakdown, leaving Scholz leading a minority government with the Greens, which failed to secure the vote of confidence at the Bundestag in December 2024. Despite the SPD being the single largest party in 2021, the party struggled to find workable partners, given how it had inherited several challenges through its coalitions with the CDU in the previous decade. Despite the alliance with the Greens and FDP, the disastrous effects of COVID-19, inflation, the Russia-Ukraine conflict, aftereffects of Merkel-era energy policies, and migration from war-torn countries to Germany continued to pull Germany in all directions, to the detriment of the SPD leadership. Moreover, it has fueled right-leaning and anti-establishment sentiments among significant swathes of the German population. They often felt the effects of a stagnant economy, blaming it on the cultural shifts due to illegal migration and inefficient EU policies. Naturally, the beneficiaries of such sentiments are the CDU and the 2013-established party, Alternative für Deutschland (Alternative for Germany- AfD). While the AfD considers themselves a eurosceptic and anti-establishment party, they are viewed as a far-right party under the lexicon of mainstream German politics. The AfD were at the fringe of the German political landscape during its founding years but has gained traction since, reaching almost 19-21% vote share in recent opinion polls, a first for a ‘far-right’ party in modern German history. This is a worrying trend for the Left-leaning parties in Germany, given that current surveys place the SPD and Greens evenly at 14% each, the Die Linke (The Left Party) at 6%, and the Sahra Wagenknecht Alliance (BSW) and FDP at 4.5% and 4% respectively. This spells disaster for centre-left and far-left politics, given that political parties must cross the 5% threshold required for Bundestag representation.
International Ramifications
The timeline of the elections coincides with the reemergence of President Donald Trump, who has consistently levelled allegations against European NATO partners. During the recent campaign trail and throughout his previous term, he has accused Europe of over-depending on the US for continental security at the US taxpayers’ expense. The radical shifts in US policy over the Russia-Ukraine conflict and the social media frenzy over Elon Musk’s podcast engagement with Alice Weidel, the leader of AfD (Alternative for Germany), sparked further debates. Political observers and experts speaking to the German media called out the actions, viewing them as election interference, given Germany’s strong legacy of identifying the risks of far-right movements since the post-war period. In addition, there is significant polarisation over domestic issues of the country, be it concerns over migration or the alleged stifling of free speech, all of which seem to be aiding the popularity of AfD.
In addition, the speech by the incoming US Vice President J.D. Vance at the recent Munich Security Conference shocked politicians and observers across Europe and Germany. Vice President Vance alleged that Europe was indulging in censorship of free speech and uncontrolled illegal immigration, suggesting how Europe must deal with such internal threats before external ones. Nevertheless, this indicates what is in store for any incoming administration after the German elections. Given the proclivity of German parties to stitch unsymmetrical coalitions beyond ideological lines, the new Chancellor and any likely coalition partners will have their task cut out for them, even if it ends up being another CDU-SPD Grand Coalition like the Merkel years. They will be forced to balance Germany’s energy priorities, economic revival, and right-leaning political rhetoric at home with efforts to save the crumbling transatlantic economic and security architecture. The question remains: What can Germany do to assuage the Trump administration’s concerns? Will it change its posture vis-a-vis the Russia-Ukraine war, Energy Policies, and illegal migration in line with the current US policy?, or will it coalesce around like-minded Western European partners, forming a consensus over a third way? It remains to be seen.
In India’s case, the previous SPD-Green-FDP Government maintained an amicable relationship, placing the country at the centre of Germany’s Indo-Pacific strategy. Indian discussions centred on mobility agreements for skilled migration, energy collaborations, and German investments, among other areas of convergence. Contrary to the perceptions of AfD’s politics, AfD’s economic advisor, Leif-Erik Holm, defended AfD’s stance on migration and emphasised the need for a trade-focused approach in Indo-German relations, in his interview with the Times of India. He rejected labels of extremism, stating that the party opposes illegal immigration while welcoming skilled workers, especially skilled Indians, who integrate into German society. The bullish perspective on India is amplified across party lines. However, the tightrope walk for Germany would involve not antagonising the US by offsetting their economic troubles through increased trade engagements with China. Given their strong trade focus on China through the previous decade, it will be a contentious issue for German-US relations. Moreover, the opportunity lies in exploring a third way with like-minded countries like India, which has maintained similar equations with France, in finding solutions to some of the biggest global issues. To capitalise on this opportunity, member states led by a German, Dutch, and French effort must aim to finalise FTA negotiations between India and the EU, among addressing other trade frictions.
Challenges & Opportunities
The incoming German government will have many challenges to resolve, including a second consecutive year of recession, an aggressive Trump administration ready to impose reciprocal tariffs, and the changing dynamics in Ukraine. Furthermore, several structural constraints remain, including an ageing population, rising labour costs, the quagmire of European bureaucracy, and the pressure to increase its defence budget. In light of the US’s pivot to the Indo-Pacific and the Middle East, EU member states will be expected to deliver more in securing borders and burden NATO commitments. Similarly, Germany’s economic options will have to survive the US’s trade wars while creating pathways for greener pastures in Asia.
For the CDU and their leader in poll contention for the Chancellor post, Friedrich Merz, the challenge will be in coalition formation and his appetite for risk-taking, amidst the rise of the Centre-Right and Far-Right parties. Germany’s parliament narrowly rejected a migration bill proposed by Friedrich Merz, which called for stricter border controls and limits on family reunions for migrants. The bill was backed by the far-right AfD, sparking controversy over CDU’s stance on cooperation with them. Despite leading in polls, Merz faced criticism through heated debates and nationwide protests, highlighting deep political divides ahead of the February 23 election. However, whether this will translate into support for the Left parties during the polls remains unclear. If the opinion polls are right, the CDU’s leads might allow it the luxury of becoming the single-largest party. However, the CDU’s coalition choices will determine Germany’s future trajectory. Whichever party it allies with, the structural issues remain in the medium term. Stability alone will not resolve CDU’s challenges, as more pressing domestic and international issues will dominate the country’s politics, amplified by a continent undergoing radical geopolitical flux.
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