What’s at stake for Europe after the German election?

The dust is now settling after Sunday’s federal election in Germany — but whatever new government is formed will be facing an uphill battle.

Germany’s top three concerns for this election were peace and security in Europe, the economy, and social issues. However, centre-right Christian Democratic Party (CDU) leader and presumptive chancellor Friedrich Merz also placed migration policy at the top of his agenda after a series of deadly attacks by non-Germans that dominated German media over the past couple of months.

Merz is under pressure to form a stable government as quickly as possible to begin tackling these issues, and has already begun coalition talks with the centre-left Social Democrats (SPD). So what exactly is at stake?

Tricky transatlantic relationship

Since the collapse of the so-called “traffic light” government just hours after US President Donald Trump was re-elected last year, the exact prospects of Germany’s strong support for Ukraine has been unclear — this as the US and Russia edge closer to a deal concerning Ukraine’s future.

With tensions between Europe and Russia running high, Rafael Loss of the European Council on Foreign Relations says geopolitical issues will be among the government’s top priorities.

Merz has recently made “numerous statements about transatlantic relations and the problems that Donald Trump will create for Germany and Europe”, Loss told Euronews. “This goes hand in hand with Germany’s defence capabilities, questions of the debt brake, conscription, and so on.”

Europe and Germany in particular are increasingly worried that the US under Trump will be less concerned about defending Europe, even as the continent grapples with the prospect of an increasingly hostile Russia and higher energy costs.

Stronger EU relationships

Relations with France and Poland have been frosty during the past couple of years, with Chancellor Olaf Scholz several times finding himself at odds with key French and Polish policies. Yet despite this, the countries have managed to work together amicably.

“The potential outcome of this election is that, with a Chancellor Friedrich Merz — if he manages to form a governing majority — there could be a reset in these crucial relationships,” Loss explains. “This could also bring new momentum to European policy from Berlin.”

“However, this wouldn’t necessarily be a strongly EU-centric policy. In many cases, Merz will likely attempt to build ‘coalitions of the willing’. Nonetheless, given the geopolitical challenges posed by Moscow, Washington, and Beijing, we must do much more on all fronts.”

Increased defence spending

Whilst Merz is promising a stronger and more stable government, questions surrounding financing increased defence spending, especially relating to the threat of Russia, are emerging.

“That is the big question that broke the traffic light coalition apart, and it will be the major question that the new government coalition in Berlin will have to answer sooner rather than later,” Loss explains.

“Ultimately, the sums involved are so enormous that one cannot rely solely on budget prioritisation, new debt, or tax measures alone. A compromise between all these elements will certainly be necessary in order to generate several hundred billion euros for both defence and infrastructure investments at the same time.”

Whilst a potential CDU and SPD coalition could bring more stability to Germany, which has also been trying to revive a flagging economy, the question of cooperation between political parties is also important, especially as German politics becomes ever more polarised.

“A black-red coalition could certainly bring stability. However, many key questions will revolve around whether a two-thirds majority in the Bundestag can be secured — for example, to amend the constitution for a new special fund, reform the debt brake, or reintroduce conscription under a new model,” Loss says.

“Here, a black-red coalition will urgently need cooperation, especially from the Greens, which I see as less problematic, but also from The Left, which holds fundamentally different views on some foreign policy issues.”

The domestic front

Inflated energy costs and the spiralling cost of living have fuelled many Germans’ disillusionment with the traditional parties of government. That much was reflected in a record result for the far-right party Alternative for Germany (AfD), which pulled in 20% of the national vote.

Support for AfD was particularly pronounced in the former East Germany, which remains blighted by infrastructure issues increasingly visible across Germany; schools are deteriorating, and there are not enough kindergartens, for one.

The next government will need to invest heavily in infrastructure, Loss says.

“Political parties, both those in government and the opposition — especially the Greens and, to some extent, The Left — will have to take responsibility by addressing these issues programmatically.”