With a new German government incoming, the implications for Europe are substantial

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By Sophie Pornschlegel and Sophia Russack

The relationship between Friedrich Merz and Ursula von der Leyen will be among the key factors in determining how constructive Germany will be in Europe.

Germany went to the polls on 23 February 2025, and the conservative CDU (EPP) came first, followed by the far-right AfD (ESN). Upcoming coalition negotiations will ultimately determine the next government’s composition, but CDU leader Friedrich Merz will likely become the next Chancellor, with the Social Democrats (SPD/PES) as the probable junior coalition partner.

The past 3.5 years were sobering. The ‘traffic-light’ coalition of the SPD, Greens (EGP) and liberal FDP (ALDE) fell short of playing a constructive role in EU policymaking, despite having set itself an ambitious EU programme. Finding compromise in a tripartite coalition proved challenging and relations between France and Germany – already not in the best shape – further eroded.

With the current geopolitical situation, the new government will have to show much more EU leadership than before. But whether they can deliver is another matter entirely.

A new government better able to act?

Germany must abstain in the Council of the EU if there’s disagreement among the coalition parties, dubbed the ‘German vote’. While this already happened under Angela Merkel, it significantly increased under the traffic-light coalition. Effectively, this means that Germany often blocks EU legislation, as under qualified majority voting (QMV), abstentions are counted as votes against. In cases like the Due Diligence Directive (CSDDD), the Packaging Regulation (PPWR) or the European AI Act, Germany not only abstained but at times even reversed previously agreed decisions.

This has two ramifications: It makes it more challenging for other member states to find stable majorities, and it undermines the EU’s decision-making culture by encouraging other member states to behave in the same way.

Many in the EU institutions and in member states hope that the new government will be a more reliable partner. Merz has pledged to make Germany speak with one voice again. His government will likely be composed of only two parties, which may make it easier to find common ground. It also looks like he plans to make EU affairs ‘Chefsache’ by giving the Chancellery a bigger say. This could be a positive development, as a united German voice is absolutely necessary for a united European voice.

The relationship between Merz and Commission President Ursula von der Leyen will also be essential to determining how constructive Germany will be in Europe. If the two leaders develop a good ‘terrain d’entente’, the next Chancellor could ensure that Germany is back in the European driving seat. Such strong, trust-based relationships will be essential in confronting an increasingly unfriendly US administration and in supporting Ukraine.

What should we expect in terms of EU policies?

Unsurprisingly, security and defence dominated German parties’ electoral programmes. The CDU manifesto supports a stronger industrial base for the European defence industry, joint defence and security coordination, increased funding for the German military and continued support for Ukraine. Here, the CDU and SPD are likely to find compromise, even if (the departing) Scholz has shown a certain reluctance to send German tanks to Ukraine.

The essential question will be how far German decision-makers will be able to shake off their transatlantic attitudes following President Trump and Vice-President JD Vance’s bombshell announcements on Ukraine – and whether they’re willing and able to provide security guarantees and funding for more European cooperation. Right after his electoral victory, Merz stated that Europe will have to become more independent from the US, giving clear indications about his intended direction of travel. 

Agreement on reforming the ‘debt brake’

At the beginning of March and in the context of the coalition negotiations, Scholz and Merz announced reforms to Germany’s fiscal policy, which would allow for increased defence spending. This includes a reform of the ‘debt brake’ that limits German debt to 0.35 % of GDP. In the future, this brake would not be applied to defence spending over the 1% of GDP, which would facilitate almost unlimited defence spending. This compromise was negotiated surprisingly quickly and reconciled originally rather opposed positions on the topic of the two soon-to-be governing parties. 

That Germany is ready to make a significant investment is good news for defence and sends a strong signal to the European partners, also in view of the overall European defence package entitled ‘ReArm Europe’ announced by von der Leyen. It yet remains to be seen how Germany will position itself when negotiating difficult budget files, such as the next Multiannual Financial Framework (MFF) and the collection of EU ‘own resources’.

Competitiveness and infrastructure investment

On the economy, the CDU manifesto is very much in line with the Commission’s agenda, focussing heavily on competitiveness and suggesting that less red tape and deregulation will lead to a stronger EU economy. They advocate for the ‘omnibus package’ and favour rolling back some climate legislation. 

While the SPD also wants to strengthen the moribund German economy, there are some divergent views on getting there, particularly regarding Germany’s investment capacity and the green transition. However, the Conservatives and Social Democrats proposed a special fund (so-called ‘Sondervermögen’) of 500 billion € for infrastructure for the upcoming coalition. This would include extra money for transport and energy infrastructure, hospitals and schools, as well as the digital transformation, where Germany is still lagging behind its European neighbours.

Finally, while migration featured prominently in the campaign, it was mostly through a national lens. However, Germany’s repeated infringements of Schengen rules could become problematic at EU level, and the hardened line on migration could lead to frictions with other European partners. 

The last chance government?

Regardless of whoever forms the new coalition, it is likely to be heavily pressured by the AfD, the largest opposition party. It won more than 20 % of the vote and heavily influenced the campaign.

If Merz’s government fails to perform, the AfD could potentially come first in the 2029 elections. The (already frayed) ‘cordon sanitaire’ might then finally break. How well the AfD fares will depend on the centre parties and, most importantly, the CDU. Merz attempting to win over AfD voters by proposing harsher new migration rules a few weeks before the election did not pay off for him in electoral terms – as seen in other countries, voters prefer the original brand. Yet despite the AfD-driven campaign focus on migration, Germany’s economy over the next few years will be the decisive factor.

Suffice to say, the pressure is enormous. While EU countries have grappled with high inflation and soaring living costs, Germany is also burdened with the collapse of its long-standing ‘business model’ – relying on copious trade with China, cheap energy from Russia and security guarantees from the US. Given the economic and geopolitical situation, Germany must clearly define its European policy objectives, look for common ground with its allies, showcase that it’s willing to compromise and constructively liaise with its European partners.

Above all, the next German government should recognise that its national interest lays firmly in a strong EU. With the US supporting Russia rather than Ukraine, the next German government needs to do the utmost to step up Europe’s security and defence and strengthen its economy. The visit of Merz in Paris right after the elections and the announcement that his first state visits in Poland and France send the right signals that Germany will hopefully be a reliable partner to its neighbours pushing ambitious goals in these difficult times.

Sophie Pornschlegel is deputy director at Europe Jacques Delors in Brussels.

Sophia Russack is a researcher at the Centre for European Policy Studies (CEPS) in Brussels.

A previous version of this article was first published on the websites of the Centre for European Policy Studies and Europe Jacques Delors.

Pictures: Merz and von der Leyen: European People’s Party, CC BY 2.0, via Wikimedia Commons [cropped]; portraits Sophie Pornschlegel, Sophia Russack: private [all rights reserved].