No time for dancing

Luther’s partner in Berlin, Uwe Wolff, CEO of NAÏMA, reports on the outcome so far of the 2025 German federal elections

Typically, CDU leader Friedrich Merz is among the first to enter the dance floor at parties. On election night it took him a long time to embrace the party atmosphere fully. Yes, he had been elected as the ninth Chancellor of Germany, and his party had garnered the most votes. However, the demanding coalition arithmetic clouded his mood until he, his party colleagues, and Germany, finally felt a sense of relief in the early morning hours.

It could have been so easy: If Merz and his party had received over 30% of the vote (as most polls predicted), then he would have had the choice between the ruling Social Democrats (SPD) of Olaf Scholz or the Greens under Robert Habeck. However, after securing 28.5% of the vote, the CDU/CSU began to lose momentum, while the SPD delivered a spectacular election debacle with a mere 16.4%, and the Greens remained stagnant at around 11%. Since Merz did not achieve 30% or higher, he would need a strong partner.

Initial projections suggested Merz could have formed a “grand coalition” with the SPD early in the evening, giving them a majority in the Bundestag. The Greens were a few percentage points short and unsuitable for the CDU/CSU to secure a majority.

To make matters worse, two smaller parties drove Merz’s heart rate to dangerous heights: the Liberals (FDP) with former finance minister Christian Lindner at the helm and the pro-Putin, Socialist-National Conservative BSW, the “Bündnis Sarah Wagenknecht.” If either had made it over the 5% hurdle, the CDU/CSU would have needed a third coalition partner in addition to the SPD to form a majority government.

Shortly after the polls closed, the FDP benefited Merz by failing to secure the necessary votes to clear the 5% threshold. However, the fate of the BSW, with whom Merz would never have formed a coalition, remained a nail-biter. It was not until the early morning hours that the relieving news came. The BSW was 13,453 votes short, did not pass the 5% barrier, and therefore enabled Merz to form a stable government with the SPD not needing a third coalition partner.

Germany breathed a sigh of relief. After 3.5 years of the so-called traffic light coalition under Olaf Scholz (SPD, FDP, Greens), which was embroiled in constant infighting, the people and the German economy longed for a stable government.

The tasks for the new German government, which wants to get down to work as quickly as possible, are enormous: Merz wants to free the German economy from the paralysing, infamous German bureaucracy and the massive regulation regime. He plans to curb migration and reform German asylum policy. He needs to relax the state’s statutory debt ceiling to allocate billions for a serious upgrade of the armed forces, innovative economic initiatives, and restoring the neglected infrastructure.

At the European level, Germany’s historically close relationship with France, which was neglected by Chancellor Scholz, will be restored, reviving the old centre of power in the EU. And as for the UK, the rapprochement between the two countries has been going on for some time and will become stronger under Merz.

Since Donald Trump took office, it has been clear to Merz that Europe can no longer rely on the Americans’ promise of support in NATO. “Europe must now make the greatest effort to be at least able to defend the European continent on its own,” Merz said recently. This should be possible, as Germany, France, Great Britain, and several other European states are among the world’s largest defence exporters.

For Merz, a Europe capable of defending itself also includes talking to the British and French about a joint nuclear umbrella for Europe. This also includes, according to Merz, “whether we could not also use nuclear sharing—or at least nuclear security—from Great Britain and France.” Merz also states that France has repeatedly raised this question with Germany: “The question has remained unanswered by German governments. We need to talk about how this could be achieved.”

As for supporting Ukraine, Merz wants to be stronger, more assertive, and more self-confident than his predecessor, Olaf Scholz. Germany, as the world’s third-largest economic power, should finally also act like a large and self-confident economic power. As a nation depending on exports, Germany must discover and develop new export markets to no longer  rely on the US or China.

Can Merz push through his program in a coalition with the Social Democrats? This seems more likely than before, because the self-confidence and strength of the Social Democrats have been severely dented on election night. As far as measures to revive the economy are concerned, business associations and SPD-affiliated trade union representatives have demonstrated an almost uncanny unity, indicating the issue’s urgency. In other areas, such as cuts to social services or restrictions to asylum policy, resistance within the SPD is still to be expected.

One final word on election night: No, there was no massive shift to the right in Germany, as reported by foreign media. 20% of Germans voted for the right-wing extremist AfD, most of them from the former East Germany (GDR.) Their voters doubled. But 80% of German voters did not vote for right-wing extremists, even with an incredibly high voter turnout of 82.5 percent.

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