The 2025 German Election: A Coalition for Change in Europe

By Ivan Ng

Editor: Eleonore Huez

The opinions expressed in this article reflect the opinions of its author(s). They do not represent the views of the UCL International Relations Society, Circum Mundum, or its Editorial Team.

The 2025 German election took place after a dramatic collapse of the “Traffic Light Coalition”, composed of the Social Democratic Party (SPD), the Free Democratic Party and Alliance 90/The Greens. Voter turnout exceeded 80% for the first time in nearly 30 years, reflecting the country’s urgent demand for stable leadership amidst rising domestic problems and escalating geopolitical tensions. As exit polls suggested, the CDU/CSU (Christian Democratic Union/Christian Social Union) led by Friedrich Merz performed strongly as voters expressed diminishing confidence in the current governing parties. On March 8, the CDU/CSU completed preliminary coalition talks with SPD, its once coalition partner of 12 years, moving one step closer to the Grand Coalition that had historically provided stability for this country and the European continent. What can Merz, and his Coalition, offer to Germany, Europe and the world?

Germany

A pressing concern for the country is its finances, as disagreements within the "Traffic Light Coalition" stalled the introduction of a budget, pushing Germany to the brink of a budget shortfall. Friedrich Merz has proposed an ambitious budget that seeks to exempt defence spending from the debt brake, which limits it to 1% of GDP. This move aims to better equip Germany amid growing geopolitical tensions and stimulate economic growth.

The debt brake was introduced shortly after the global financial crisis of 2008, to prevent excessive debt that could burden future generations. However, with crises such as the Russo-Ukrainian War adversely affecting the economy, Germany urgently needs to reevaluate the debt brake to boost growth and regain control over its finances. Merz’s proposal, unlike typical bills, requires a two-thirds majority in the Bundestag since the debt brake is enshrined in the constitution. With a new Bundestag term commencing after the election and the SPD losing significant seats, Merz must pass the bill before the next term, as the far-left Die Linke and far-right AfD are expected to exceed one-third of seats and could form a "blocking minority" to prevent the budget from passing.

Despite facing strong resistance, Merz is anticipated to secure the passage of his proposal before the new term. He gained support from the Greens on March 14 after rounds of negotiations and concessions, achieving the two-thirds majority needed for approval. This success in navigating party conflicts was reflected in the markets, with the Euro, German government bond yields, and equities all rising in response to his negotiation achievements.

With the CDU/CSU and SPD eager to form a coalition and agreement on fundamental policy directions such as immigration and economic growth, it is expected that Germany will welcome a relatively stable government, at least compared to its predecessor.

Europe, and the world

Prior to the election, Friedrich Merz, who has spent 20 years in private finance, expressed confidence in his ability to engage in "business" with Donald Trump, the leader across the Atlantic who shares a business background, a tough stance on immigration, and desire to eliminate unnecessary bureaucracy. However, the meeting in the Oval Office between Trump and Ukrainian President Volodymyr Zelenskyy may have suggested otherwise.

Trump’s unprecedented criticisms of Zelenskyy raised questions about the future of US support for Ukraine, highlighting a rift that could impact European security. One of the key persons agitating Trump’s emotions in the meeting was his Vice President, JD Vance, who, earlier in February, reprimanded European leaders as the “greatest threat” posed to their own continent, suppressing free speech and retreating from "some of its most fundamental values".

John Kampfer, in his articles published in the Guardian, emphasised that the situation was particularly crucial to Germany, as “for the French and Brits, the US about-turn and warm embrace of Vladimir Putin is horrifying… [while] for Germans it is existential, and challenges the bedrock of their post-1945 state”. Germany has been deeply affected by the shifting geopolitical landscape, particularly in light of its historical context and reliance on the US for security. The potential for a realignment in US foreign policy, especially one that appears to favour Russia, poses a direct threat to Germany’s stability and its foundational principles established after World War II.

Merz’s hawkish stance reflects a recognition of the need for a stronger Europe in light of potential betrayals from a Trump-led US. While it’s clear that Europe may not emerge as a dominant power due to its deteriorating economies, migration problems and deep societal fragmentation, Merz's mission focuses on how to preserve Germany’s and Europe’s sovereignty amid the geopolitical tensions between the US, China, and Russia. It is essential for Germany to play a central role in reuniting Europe and strengthening its collective security. 

The 2025 German election presents a critical juncture for the nation as it faces pressing internal and external challenges. As the nation grapples with the potential impact of a changing US foreign policy and rising tensions with Russia, Merz's leadership will be essential in promoting a united Europe that can assert its sovereignty. The road ahead will be challenging, but the focus on resilience and collaboration may well define Germany's and Europe’s future in an increasingly complex global environment. How Merz and his coalition navigate these issues will significantly influence Germany's standing and its role on the European and world stage.