On 9 April, the day that Friedrich Merz announced Germany’s new coalition agreement between the Christian Democrats (CDU) and the Social Democrats (SPD), the far-right Alternative for Germany (AfD) overtook the centre-right CDU in the polls for the first time. Merz had sought to see off the threat from the AfD by moving his CDU party further to the right – a strategy that political scientists call “accommodation”. But instead, with Merz to become chancellor on 6 May – assuming SPD members vote in favour of the agreement – the far right is stronger than ever before.
During the election campaign, Merz focused on immigration. He promised a Migrationswende, or turn in migration policy, to go with the Zeitenwende, the rethink of defence policy prompted by the Russian invasion of Ukraine three years ago. In January he cooperated with the AfD to push an “influx limitation bill” through the Bundestag and promised what he called a “de facto entry ban” on his first day as chancellor.
The coalition agreement between the CDU and SPD promises a “deportation offensive” and includes measures to undo steps that the previous coalition, led by the SPD, had taken to make it easier for immigrants to become German citizens. Merz still plans to introduce permanent checks at Germany’s borders, though the agreement says he will do so in cooperation with other EU member states rather than unilaterally. Nevertheless, the agreement indicates a hardening of immigration policy in Germany.
However, to many Christian Democrats – especially the Junge Union, the youth wing of the CDU – Merz made too many concessions to the SPD, which had only received 16 per cent of the vote in this year’s election, its worst result for 130 years. Opponents of the agreement in the CDU see it as a return to the centrism of Angela Merkel – which prompted the formation of the AfD in the first place – rather than the turn to the right that Merz promised.
However, the focus of the anger from right-wing Christian Democrats is as much to do with economic policy as immigration. What many are especially angry about is the way that Merz seems to have left behind the fiscal conservatism for which the Christian Democrats have long stood – in particular, by abandoning the debt brake that is written into the German constitution and to which, in its election manifesto, the CDU promised it remained committed.
The debt brake was introduced by the Social Democrat finance minister Peer Steinbrück in 2009 during Merkel’s first term, and blocks the state from using borrowed funds to pay for investments. After defending the debt brake for years, even as it prevented much-needed investment, the Social Democrats finally accepted that it needed to be reformed; this was what led to the collapse of the previous coalition led by Olaf Scholz. But in an election debate with Scholz in February, Merz vehemently continued to defend the brake and to rule out its reform.
However, immediately after the election, he made a deal with the Social Democrats and Greens to amend the constitution to exempt defence spending from the debt brake and create a €50bn infrastructure fund. Merz needed to make the deal while the outgoing Bundestag was still in place because the success of the AfD in the election meant that centrist parties would soon no longer have the two-thirds majority in parliament needed to amend the constitution – a dubious move from a democratic perspective.
The move has transformed attitudes to Merz, especially on the right – and seems to have contributed to the AfD’s surge. According to a poll carried out for the public-service broadcaster ZDF and published on 21 March, 73 per cent of German voters, 96 per cent of AfD supporters, and even 44 per cent of Christian Democrat voters thought he had deceived them. According to another poll this month, only 21 per cent voters think Merz is trustworthy.
The current rise in support for the AfD reminds us that it began as an anti-debt party. It was created by economics professors in 2013 in reaction to Merkel’s response to the euro crisis and especially the successive bailouts of Greece, to which she said there was no alternative – hence its name. Although its focus shifted to immigration after the refugee crisis in 2015, it remains a party of Eurosceptic fiscal hawks – its leader, Alice Weidel, called Merz’s deal with the Social Democrats a “financial policy coup d’état”.
The loosening of Germany’s fiscal rules, and the backlash against it, also takes us back to the economic issues that dominated the EU during the euro crisis – in particular, the problem of the EU’s version of Germany’s debt brake, introduced at German insistence in 2011. During the euro crisis, the problem was that loosening the fiscal rules, which would have reduced Euroscepticism in debtor countries such as Greece, would increase Euroscepticism in creditor countries like Germany.
These issues were never resolved – and now make it harder for the EU to unite and respond to the uncertainty about the US’s commitment to European security. In the context of the war in Ukraine, there is a new version of this zero-sum game: while many in Europe, especially in Poland and the Baltic states, welcome Merz’s loosening of the fiscal rules to increase defence spending, it is only strengthening the far right in Germany.
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This article appears in the 30 Apr 2025 issue of the New Statesman, The War on Whitehall