Conservative leader Friedrich Merz won the German election Sunday and is on track to take the reins of the EU’s largest economy.
It’s not yet clear exactly what the new German government will look like — or how far Merz will be able to reshape German politics as he sees fit. It’s likely to be weeks before coalition talks between Merz’s Christian Democratic alliance (CDU/CSU) and other parties reach an agreement and Merz becomes chancellor.
Still, one thing looks certain: Merz will take Germany in a different direction from that of current Chancellor Olaf Scholz. It may not even look like the Germany that Angela Merkel, also of the CDU, led for 16 years, until 2021.
Last month, Merz (unsuccessfully) pushed the German parliament for new migration measures with the support of the far-right Alternative for Germany party. It marked a clear departure from Merkel’s “Wir schaffen das” pledge to take in refugees.
And there’s more. From a potential U-turn in Germany’s long-standing policy on nuclear energy and a more hawkish line on China, to plans to reboot the German-French axis to bolster EU trade, Merz could shake up the political landscape of Germany and, in one fell swoop, that of the European Union as a whole.
Here’s what a Merz-led Germany means for the EU.
Defense
Two days before the election, Merz issued a stark warning that Europe must be prepared to defend itself without the U.S. “We must prepare for the possibility that Donald Trump will no longer uphold NATO’s mutual defense commitment unconditionally,” Merz said in an interview with a German broadcaster, signaling that Germany may seek nuclear protection from European allies.
“We need to have discussions with both the British and the French — the two European nuclear powers — about whether nuclear sharing, or at least nuclear security from the U.K. and France, could also apply to us,” he said.
Elsewhere, Merz has promised big and broad policies to scale up Germany’s defense industry, and will be expected to follow through quickly on an earlier pledge to scrap his predecessor’s block on the dispatch of long-range Taurus cruise missiles to Ukraine for strikes on Russian targets.
A major theme of his early weeks in the chancellery will be setting out how Berlin plans to raise the cash to expand on the €100 billion fund agreed under the Scholz government to finance an upgrade of the Bundeswehr’s gear and digs.
That cash pot has been allocated and will be spent up by 2027 on massive procurement programs, raising questions over how Berlin plans to meet its obligations to NATO — which Merz has promised to do in the future — from the conventional national budget.
“The 2 percent target may be pushed up again and then we will have to prepare ourselves for that,” Merz told POLITICO’s Berlin Playbook podcast of plans to further raise the NATO target given Trump has called for a 5 percent target.
Energy
Over the past few years, German energy policy has focused on turbocharging investment in renewable energy, shutting down nuclear reactors and scrambling to secure gas supplies from abroad to replace Russian imports.
Merz’s CDU has similarly vowed to “consistently use renewable energies, all of them.” But his political family, the center-right European People’s Party, is also pushing back against EU green energy targets.
Meanwhile, Merz has taken a warmer tone toward nuclear energy than Scholz, which is challenging a long-standing German taboo around atomic power. While the country is unlikely to revive its shuttered reactors, a more lenient nuclear stance from Berlin could help pro-atomic countries persuade Brussels to treat atomic power more like renewables.
Merz has also said he wants to repeal Germany’s hard-fought Building Energy Law, which aims to accelerate a clean heating rollout — offering a potential signal to green skeptics in Europe.
Climate
A Merz-led government will place less emphasis on climate change than Scholz’s coalition. Merz expressed concern on the campaign trail about the impact of climate policy on business, vowed to put economic growth above all other concerns and led a call to roll back several EU green regulations.
But green advocates express confidence that in government Merz’s rhetorical hammer will turn feather duster. Industry, broadly, wants less bureaucracy, but it also wants consistent policy. Industrial stimulus can be used to help companies become greener and more efficient. “That they will not do it in the name of climate policy. Fine. If it’s economic policy for them. Fine,” said Linda Kalcher, executive director of the Strategic Perspectives think tank.
Sustainability
Merz, like Scholz, wants to delay key corporate sustainability reporting rules to boost Germany’s ailing industry.
That means it’s pretty much assured that Germany under Merz would back a strong omnibus simplification bill for green rules, a proposal the European Commission is expected to release on Feb. 26.
A Merz victory also means the center-right European People’s Party, which dominates the European Parliament and is Merz’s political family, once again has a powerful ally in the EU’s biggest economy. Already, the EPP has pushed hard to water down the EU anti-deforestation rule with the support of groups further to the right (mostly without success thus far).
Source: Politico
