German Political Scene
Like many EU nations this year, Germany has faced significant political upheaval following the EU elections of June 2024. Shortly after, three German states held elections in October, further reflecting a broader trend toward the political right in Germany, the EU, and globally. In the June EU elections, the far-right party Alternative for Germany (AfD) achieved a notable 16% vote share, up from 11% in 2020. As the sole German party within the Europe of Sovereign Nations (ESN) group in the EU parliament, the AfD’s success brought 14 seats to the ESN.
In regional elections, German support for the AfD surged, with the party winning substantial vote shares and even taking control of a state. In Brandenburg and Saxony, the AfD received 29.2% and 30.6% of votes, narrowly losing to the SPD by 1.7% in Brandenburg and to the CDU by 1.3% in Saxony. In Thuringia, the AfD secured a landslide victory with 32.8% of the vote, outpacing the closest party, the CDU, by 9.2%.
German Economic Downturn
Once one of the strongest in the world, Germany’s economy now faces an energy crisis, rising inflation, and growing risks of a trade war with both the EU and China. Like much of the world, Germany’s inflation can be traced to the COVID-19 pandemic and its aftershocks on supply chains and development projects. General economic sentiment has only worsened with recent electoral instability, dropping Germany’s economic sentiment index to 7.4 points following Donald Trump’s re-election in the United States.
The energy crisis stems from Germany’s severance from Russian oil and gas after the Russian invasion of Ukraine in February 2022 and the subsequent destruction of the Nord Stream pipelines. Although this shift away from the Russian market may have long-term benefits, it has currently driven up energy prices and forced Germany to seek new avenues for energy self-sufficiency. The war in Ukraine has further strained Germany’s economy through extensive military aid, with an estimated €28 billion spent on defense equipment, security support, and military training. Additionally, Germany has taken on an EU-high of 1.3 million Ukrainian refugees, adding pressure to German officials and city resources as immigration remains a growing issue within the EU.
Compounding these challenges are strained economic relations and perceived unequal trade treaties with China. In early October, the EU announced automaking tariffs on electric car imports from China, a move that met strong opposition from German officials and industries. EU leaders saw the tariffs as a way to counter China’s dominance in European markets and bolster local industries. However, the tariffs risk provoking a Chinese response, potentially impacting key EU exports—especially in the auto sector, where China is one of Germany’s largest consumers. China responded swiftly with a tariff on EU whiskey, signaling a possible looming trade war as both blocs prepare for further escalation.
Direct Losses
Germany’s economic downturn has recently led to significant losses in its auto industry. Volkswagen has announced the closure of three factories, with management proposing additional layoffs and pay cuts, citing lagging growth in the EV market and mounting competition from Chinese automobile manufacturers. Layoffs are expected to affect tens of thousands of workers, with pay cuts potentially reaching up to 18%. Alongside Volkswagen, other major German car manufacturers like BMW, Mercedes-Benz, and Porsche have increasingly voiced concerns about declining demand for their products and a substantial drop in profits.
Current Government and Trump
Chancellor Scholz, who has led Germany through turbulent years, now faces substantial backlash and widespread disapproval from both his coalition and opposition parties. His tenure has seen Germany’s once stable government, previously led by long-standing Chancellor Angela Merkel of the CDU, edge toward collapse, likely resulting in Germany’s first snap election since 2005. Disputes over economic policy, migration, and austerity measures culminated in the dismissal of Finance Minister Christian Lindner, with Scholz citing a “lack of a trust basis for future cooperation.” The subsequent collapse of the Traffic Light Coalition, already operating as a minority government, may lead Scholz to form a temporary arrangement with the CDU, Germany’s most populous party, to handle budget management and basic lawmaking.
At a recent summit in Budapest, many EU leaders emphasized the importance of a stable Germany, voicing concern over the risks posed by an unstable German government. Trump’s re-election, a source of unease for numerous EU states, has renewed leaders’ concerns about Europe’s vulnerability to his policies. Trump’s previous rhetoric, which included wavering commitment to Ukraine, economic and military pressure on the EU, and hints at a potential NATO withdrawal, has pushed EU leaders to consider strengthening European sovereignty. Germany, both geographically central and a political cornerstone of the EU, must be a pillar of stability to secure a bright future for the continent.
What Now?
Political uncertainty in Germany, coupled with mounting public frustration over years of economic hardship, threatens to further shift support toward the far-right. AfD leader Alice Weidel described the breakdown of the governing coalition as a “liberation” from the self-described progressive coalition, which she claims nearly drove Germany to economic ruin. Meanwhile, voters may also be drawn to the newly established Bündnis Sahra Wagenknecht (BSW), an emerging far-left, pro-Russian party.
For some EU leaders and economists, however, the coalition’s collapse presents a timely opportunity to reshape a German government that many viewed as a “marriage of convenience.” Yet, with the snap election months away, much could change based on the evolving roles of Russia, Ukraine, China, the EU, and the U.S. in global politics. Will the anticipated February election see a consolidation of centrist voters around traditional parties like the CDU? Or will rising discontent with the status quo continue pushing the electorate toward political extremes?
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