As Germany grapples with economic turmoil and shifting global alliances, its new leadership faces tough choices on security, trade, and transatlantic ties.
There are moments in history when pivotal but unconnected events move in tragic concert. What we are witnessing in the West is one such juncture, a time of great geopolitical churning. And in the middle of it is Germany, Europe’s great power shaken by a general election that returned a fractured verdict and a likely leader who plans to upend his country’s traditional geopolitical foundations. How that plays out will affect not just Germany but the world as we know it.
Friedrich Merz, a 69-year-old multimillionaire corporate lawyer turned conservative politician, emerged as the likely Chancellor following this February’s inconclusive German elections. The political alliance dominated by Mr Merz’s Christian Democratic Union won 28.6 per cent of the popular vote followed by the far-right Alternative for Germany, or AfD, with 20.8 per cent of the vote, leaving Chancellor Olaf Scholz’s Social Democrats (SPD) with just 16.4 per cent, a historic low.
Germans clearly are dissatisfied with the way their government is being run. In particular, they are worried about their economic well-being, the flood of migrants, rising crime and a shrinking job market. The German economy too contracted for the second consecutive year in 2024. All this led to the untimely collapse of Mr Scholz’s government last November and the subsequent snap polls held last month.
One of the reasons for Germany’s economic woes is the Ukraine war, that has ruptured ties with Russia, the main supplier of cheap energy. Having turned its back on Moscow, Berlin found itself compelled to purchase relatively expensive oil and gas from the Middle East and the United States.
German industry turned uncompetitive overnight.
To make matters worse, Berlin decided to pour in cash to fund the Ukraine military, becoming that country’s second largest arms donor after Washington. This despite the fact that the country’s public finances are in dire straits and money for Ukraine had to be procured by draining welfare and other domestic programmes.
One measure of how perturbed the average German is can be gauged from the record turnout figures in the polls, which were the highest in forty years. The 82.5 per cent voter turnout meant more than four out of every five Germans came to the polling booths this time. But clearly, they were not sure which was the best way ahead -- hence the mixed verdict.
The resulting ambivalence propelled Mr Merz as frontrunner in the race for Chancellor. He claimed he will form a government this month with support from Mr Scholz’s Social Democrats, whom he has effectively defeated. He had little choice as he has promised to uphold the so-called “firewall”,
or Brandmauer, in German politics that forbids any dealing with rightist forces like the AfD. At any rate, despite the hysteria, right-wing forces are not the problem in Germany’s politics; rather it is the deep hole which the country’s leaders have dug their country into.
Mr Merz promises to hit the road running with an “ambitious schedule” that will prove “Germany is taking action and that change is afoot”. About the threat posed by the AfD, he is dismissive, saying it would disappear once he solves the country’s problems. That might, however, be easier said than done, given the huge challenge of restoring the country’s economic competitiveness while simultaneously increasing the welfare tap.
Mr Merz’s Achilles heel could be his hardline geopolitical perceptions. Europe today is headed into dangerous waters with the United States under President Donald Trump preparing to downgrade the trans-Atlantic alliance. Rightly or wrongly, Mr Trump wishes to pivot to Asia where he views China to be the principal challenge. At the same time, he wants Europe to stop relying on the United States for its security.
Even before securing the Chancellor’s post, Mr Merz bombastically declared he would work to “achieve independence” from the US. Immediately after the elections, he declared: “The interventions (meddling) from Washington were no less dramatic and drastic and ultimately outrageous than the interventions we have seen from Moscow. We are under such massive pressure from two sides that my top priority is to create unity in Europe. My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA.”
How exactly he will achieve this remains unclear. Germany, or Europe for that matter, hardly has a military worth speaking of. Years of fiscal profligacy by European governments has emasculated their defence capabilities. Germany is protected by a massive 50,000-strong US Army contingent, two USAF bases and American missiles. The European economies, too are highly dependent on the United States. The US happens to be Germany’s top trading partner and biggest gas supplier.
To make matters worse, Germany (as well as much of Europe) has broken with the world’s other two major economic players, China and Russia. The former is livid with Europe for imposing tariffs on its exports by claiming that state-promoted over-capacities in Chinese manufacturing is flooding the continent and swamping its industries.
Mr Merz, being the anti-Russia and anti-China hawk that he is, can only further exacerbate the rift.
He has actually termed China as a security threat to Germany and is also a great supporter of Ukrainian President Volodymyr Zelenskyy. He has long been vociferous in demanding massive military aid for the Ukrainian war effort and has made reckless demands to supply the Taurus cruise missiles to Ukraine so that it could strike targets deep inside Russia.
He believes that much of Germany’s security problems could be solved if France and the United Kingdom could be convinced to extend their nuclear umbrella over Germany! That apart, he appears committed to raising Germany’s defence spending in tandem with other European nations. This move alone is estimated to cost Europe $270 billion each year over the next ten years.
Being a Euro hawk at this juncture in history does not appear to be a winning strategy, especially when the continent’s share of powerful friends is greatly diminished. Ukraine is a lost cause, and promoting further hostilities against Russia can only debilitate Germany. However, as one Western columnist said, “The past three years proved that Germany is willing to sacrifice its objective national interests in pursuit of ideological goals”. Should it do that, the world could once again be saddled with a dysfunctional major power lurching from one crisis to another. The last time this happened was in the 1930s.
