German Federal Election 23rd February 2025

[HisMajestyBOB]

 

[Tamas]

Oh FFS

[Syt]

That's just great.

[Syt]

https://www.nytimes.com/2025/03/04/opinion/friedrich-merz-germany-chancellor.html

Germany Needs Something New. Instead It's Getting This Guy.

By Lukas Hermsmeier

Friedrich Merz didn't waste time.

Having led his party, the Christian Democrats, to first place in Germany's election last month, Mr. Merz swiftly assumed the mantle of chancellor-in-waiting. He urged the country to move quickly to address the challenges, both domestic and foreign, that threaten to overwhelm it. "The world," he said, "is not waiting for us."

He's not wrong. Germany needs to get its act together, fast. The far-right Alternative for Germany, exploiting a shrinking economy and a widespread sense of malaise, came in second, winning 20 percent of the vote. The extreme right is now the strongest it has been since the end of World War II. President Trump's rapprochement with Russia and castigation of Europe, meanwhile, threatens to upend the international order and Germany's place in it. In the face of both tests, the country must at once renew and reorient itself.

The task calls for a leader with a fresh vision of the future. Unfortunately, that's not Mr. Merz. Committed to tax breaks for the wealthy, harsh restrictions for migrants and cuts for welfare recipients, he is a throwback figure. His program amounts to an effort to turn back the clock to a time when the country could depend on cheap energy and plentiful exports to propel it on the world stage. Today, Germany is in urgent need of change. Instead it's getting Mr. Merz: yesterday's man, with yesterday's ideas.

Born in 1955, Mr. Merz grew up in a Catholic family in the Sauerland, a staunchly conservative region in western Germany. As a teenager, he thought the '68 generation of leftist activists were "crazy." He worried, too, that the neo-Nazi National Democratic Party of Germany would make it into Parliament. By the time he joined the Christian Democrats' youth organization at age 17, it was clear politics was his future. In 1989, after law school and a spell in the profession, he was elected to the European Parliament; five years later, he sat in the German Parliament.

He enjoyed a steady rise there, notably popularizing the concept of Leitkultur, a set of norms to which every immigrant should submit. But the top prize was blocked by his longstanding rival, Angela Merkel. After losing the leadership to her in a bitter power struggle in the early 2000s, he gradually shifted into the private sector, amassing a sizable fortune in the process. But Ms. Merkel's departure from the party leadership gave him a chance at a comeback. On his third attempt, promising a much tougher line on crime and migration, he finally took control of the party in early 2022.

His tenure has been uneven. Jutta Falke-Ischinger, a co-author of an unofficial biography of Mr. Merz, describes him as someone who lacks "impulse control," and it's possible to see that waywardness in his leadership. He has made headlines with insults to minority groups, including Ukrainian refugees and Muslim children, resulting in more than one public apology. His sometimes absurd, baseless comments — claiming, for example, that rejected asylum seekers were taking all of the country's dental appointments, leaving none for Germans — suggest someone happy to play into right-wing talking points.

His biggest gamble, however, came during the election campaign. In January, after an asylum seeker stabbed several people in Bavaria, killing two, Mr. Merz brought a draconian anti-migrant proposal to Parliament, relying on votes from Alternative for Germany to pass it. This collaboration not only broke his own promise not to work with the party but also shattered the postwar firewall blocking the far right. Criticism was loud and immediate. Coming when he was cruising toward victory, it seemed like a strange step.

Since then, Mr. Merz has cast himself as a bulwark against autocracy, shielding Europe from the authoritarian depredations of America and Russia alike. There is no imposture here: An old-school institutionalist and lifelong trans-Atlanticist, Mr. Merz strongly believes in both the European Union and NATO. For him, German support for Ukraine is not up for debate and the emerging alliance between America and Russia is an indefensible affront. On election night, he said that Europe — where it was "five minutes to midnight" — must prepare to become independent from the United States.

These are strong words, to be sure. But it's a move Germany has seen before. In the early 2000s, then-chancellor Gerhard Schröder also distanced the country from America, in that case over its war in Iraq, and energetically drove European integration. That's not all Mr. Merz has borrowed from Mr. Schröder. His set of proposals, labeled Agenda 2030, bears more than a passing resemblance to a series of reforms enacted by the Schröder government, known as Agenda 2010. As with those earlier policies, the focus is on reducing social security payments, cutting regulations for companies and offering tax breaks to corporations. The aim, Mr. Merz has said, is to "restore the competitiveness of this country."

The problem is that the conditions for Germany's past competitive edge — cheap Russian gas, a huge low-wage sector and booming exports — no longer exist. There are things Mr. Merz could do to recharge the economy: back renewable energy; make targeted investments in public infrastructure, the care sector and technology; and, above all, bring about a comprehensive investment push. But he remains committed to Germany's debt brake, which ensures strict limits on spending, and refuses to tax large fortunes and inheritances more heavily. The result is a program both inadequate and underfunded.

It's not just the economy Mr. Merz would like to take back to the past. He plans to undo the few moderate social reforms of the previous government — for example, on cannabis legalization and legislation enabling easier gender self-identification — and to intensify the hostile environment for migrants. He won't entirely get his own way, of course. He's likely to form a coalition with the Social Democrats, another throwback to the so-called grand coalitions that dominated the country's politics for much of the Merkel era. How much they challenge him is another question.

In many ways, Mr. Merz embodies the dilemma of contemporary conservatism. He maintains a professed opposition to far-right parties and autocratic regimes while engaging in the anti-migrant fearmongering favored by the far right. He wants to restore a bygone social and economic order but refuses to countenance the progressive reforms that might achieve a better settlement. The Christian Democrats' campaign slogan was "forward again." But under Mr. Merz, they're just looking backward.

[Zanza]

Yeah, fits my perception. 

[Sheilbh]

This seems basically good - in terms of, from my reading, this is more of a permanent/sustainable shift than the special fund set up under Scholz, is that right?

I think it should also help Europe's economies too - in much the same way as energy transition should in theory but there tend to be more jobs in defence manufactuing.

Having said that I slightly worry about the legitimacy of a lame duck super-majority doing something like this when the electoral result means they wouldn't have a super-majority. I think the needs of the moment probably outweigh that right now:

Germany's future coalition partners to relax debt rules to boost defence budget
Conservative alliance and Social Democrats to propose exempting spending of more than 1% of GDP on defence
Tue 4 Mar 2025 20.01 GMT

The prospective partners in Germany's next government have said they will seek to loosen rules on running up debt to allow for higher defence spending.

They said they will also seek to set up a huge €500bn ($533bn ) fund to finance spending on Germany's infrastructure over the next 10 years.

Centre-right election winner Friedrich Merz, who is trying to put together a coalition government with the centre-left Social Democrats of the outgoing chancellor, Olaf Scholz, said the two sides would propose exempting spending of more than 1% of gross domestic product on defence from rules that limit the government's ability to borrow money.

"In view of the increasing threat situation, it is clear to us that Europe – and with Europe, the Federal Republic of Germany – must now very quickly make very big efforts very quickly to strengthen the defence capability of our country and the European continent," Merz told reporters at a hastily convened news conference.

"We are counting on the United States of America standing by our mutual alliance commitments in the future as well," he said. "But we also know that the funding for the defence of our country and alliance must now be expanded significantly."

The necessary decisions "no longer tolerate any delay, at the latest since the most recent decisions by the American government," Merz said.

He added that his bloc and the Social Democrats will bring legislation on the exemption for defence spending and the infrastructure package, which will be financed by loans, to Germany's outgoing parliament next week.

Merz also said on Tuesday that he would support the immediate approval of a €3bn aid package for Ukraine that had been held up in parliament for weeks.

Merz told reporters at a press conference that he would meet Scholz on Wednesday "to speak about the urgent help needed for Ukraine, around 3.0 or €3.5bn , which ... can be approved now as off-budget expenditure".

Shortly after Russia launched its full-scale invasion of Ukraine in 2022, Scholz pledged to increase Germany's defence spending to the current Nato target of 2% of gross domestic product and announced the creation of a €100bn special fund to modernise the military.

But that fund, with which Germany has met the 2% target, will be used up in 2027, and the advent of the new US administration has brought a new sense of urgency to efforts to further beef up the military and defence spending.

Germany's "debt brake", introduced more than a decade ago, allows new borrowing to the tune of only 0.35% of annual gross domestic product, though it can be suspended for emergencies that are out of the state's control.

It was suspended for three years after the Covid-19 pandemic started in 2020 to allow for large amounts of borrowing to finance various support and stimulus packages.

Associated Press and AFP contributed to this report

I think I saw in one of the Guardian's live blogs that if you exclude the special fund in 2022 (because it is a special fund that will be exhausted) regular German defence spending since 2016 has basically just kept pace with inflation. So it has grown by 0% of GDP since Trump's first election - so this is positive.

[Zanza]

I hope they can actually pass this still. That would make governing much easier and would not cause as much frustration.

[Zanza]

I think I saw in one of the Guardian's live blogs that if you exclude the special fund in 2022 (because it is a special fund that will be exhausted) regular German defence spending since 2016 has basically just kept pace with inflation. So it has grown by 0% of GDP since Trump's first election - so this is positive.

It grew, especially during the first Trump term, but far away from 2%:

[Sheilbh]

Fair, I think the Guardian stat was it didn't grow as a share of GDP between 2016-24 (excluding the special fund) - so the defence budget kept pace with growth and inflation. So as a share of GDP and the distance from 2% there's no difference between now and Trump's first election but obviously there is more cash in the budget.

[Sheilbh]

I hope they can actually pass this still. That would make governing much easier and would not cause as much frustration.

Yeah - I'm going to be a little positive here.

This might be totally wrong and could all fall apart but I'm encouraged by Merz so far. I think it's bold that he raised a need for talks with the UK and France on nuclear immediately after Vance's speech and before the election even happened. I think doing this with a lame duck Bundestag is arguably challenging democratically but definitely bold and probably the right thing.

But what really made me wonder about this was I listened to a podcast with Adam Tooze today - that was recorded and came out several weeks ago. So it was just after Vance's speech (I think it might have even been before the election or possibly a day or two after). Part of it was talking about defence but then also Germany's economy and as Tooze pointed out lots of focus is on "competitiveness" which is not Germany's problem and is, in fact, a response to the weakness in Germany's economy which is investment. He said that Merz had started talking about "investment" during the election campaign but framed that as private sector investment which would be nowhere near adequate - I think he said studies on this indicate Germany needs about €500 billion of investment in things other than defence which will require the state. He said he thinks Merz "profoundly" gets the issues with Germany's economy on that lack of investment and was perhaps being political because during an election campaign investment = debt = bad.

But as a huge critic of the debt brake and the impact that has on necessary spending, it was really interesting hearing that a few days after Merz proposes a way to resolve the debt brake issue for defence and a €500 billion infrastructure spending fund.

It is very early days. He's not even in office yet. And I get that the vibes about him are bad. But I slightly wonder if there's a Nixon goes to China thing here? it takes a conservative, very West German, bone-deep Atlanticist Christian Democrat to do things like talk seriously about the US as a non-reliable partner requiring a European alternative, to overcome the fiscal fetish and also to set up the investment required? Basically despite the bad vibes these moves indicate someone who is engaging with the reality Merkel spent her entire Chancellorship ignoring, despite impeccable "leader of the free world" vibes. It also feels like it should be a lot easier because BSW just fell short of 5% so a two party coalition is do-able.

Separately I mentioned in the other thread that I didn't see any reason to think Europe was likely to snap out of its stagnation - I think military spending could do that. Like post-war America, basically a type of military Keynesianism - but it will take a commitment (which I know the French push but others are less keen on) on spending for domestic manufacturing. How Europe squares that with its energy challenges and decarbonisation goals is going to be a huge challenge though.

On the election - just looking at the results by party, it'll be interesting to see how the West/East divide plays out as this seems (and the alternative Kenya coalition is the same) very much a Western coalition while the East mainly voted for AfD, Die Linke and BSW:
https://www.theguardian.com/world/ng-interactive/2025/feb/23/german-election-2025-results-in-full-live

(Totally separate and on the East/West divide - I wonder why some areas historic experience left them deeply opposed to and fearful of Russia like the Baltics and the Poles while elsewhere there's more openness like East Germany, Slovakia and, for me most extaoardinarily, Hungary? )

Edit: Also on the Nixon goes to China - I think he's indicated support for EU debt to support on defence but wants it spent at a European level (which I think is a better choice) rather than through national governments.

[Zanza]

That's a very generous and optimistic view of him.

[Sheilbh]

Optimistic for sure - I think view is a bit strong

At best a very quick hot take on first steps - subject to massive revision and no certainty Primarily prompted by weirdly hearing that studies say Germany needs about €500 billion of primarily state investment just days after reading that's what Merz and the SPD have agreed (plus defence spending).

Don't know if it's generous - I've got no real view on him. But I think these moves are encouraging.

[Zanza]

After the federal election last month and the planned initial session of the next parliament on March 25th, the old parliament would normally not do anything big anymore in the lame duck period.

Not this time. As the 'democratic' parties (as opposed to AfD, Left) will lose their two-thirds majority, they passed three constitutional amendments today. Mainly to allow more spending for defence and infrastructure, softening the prior very strict constitutional debt limit.

This is a significant success for the social democrats and greens regarding policy and for the next chancellor Merz because he has a basis for governing now. But he had to do a 180 on his pre-election promises. Which reduces his legitimacy , which in turn help the extreme parties.