Olaf Scholz has avoided a major crisis. This weekend, the Chancellor’s party, the Social Democrats of the SPD, came out on top in the regional election in Brandenburg, closely followed by the far-right party Alternative für Deutschland (AfD). The German political class will now prepare for the next crucial deadline: the federal elections, which will take place in a year and are already looking very dangerous. Especially since Berlin, mired in a major governance crisis, must manage urgent issues. Germany specialist Eric-André Martin details them for L’Express.
1 – A coalition paralyzed by its disagreements
This was clearly seen this summer during the budget debate. Just to find a compromise on revenue and expenditure, it took months of discussion, and we even came close to breaking up! We can therefore assume that the current coalition is content to deal with current affairs, because the parties that make it up – Greens, liberals (FDP) and social democrats (SPD) – are getting on less and less well. And the closer the election gets, the more politically they will have an interest in showing their disagreements.
If we go into detail, we have, first of all, a liberal party (FDP) that is getting bogged down in an increasingly marked and dogmatic financial orthodoxy, and which is preventing any progress on many issues, particularly on the SPD’s social programme. The latter has a major authority problem, because Chancellor Olaf Scholz, who came from its ranks, has become very weak. The question will arise as to whether he should be re-elected for the next election. Then there are the Greens, who are seriously discredited because of the cost of the energy transition. Indeed, the German political class holds them largely responsible for the difficulties of the economy – which is partly unfair.
Finally, in the opposition, there are the conservatives (CDU), who have a clear path ahead of them, led by their leader Friedrich Merz, who has just been installed as the official candidate. That said, this conservative party has a strategic problem. What does it want? What are its axes? On the issue of immigration, the CDU may howl with the wolves, but it must not forget that the current situation has its origins in 2015, with the policy pursued by Angela Merkel during the refugee crisis. On financial issues, it leaves the liberals in the front line, but the conservatives are – they too – guardians of orthodoxy. It was they who, a year ago, brought the Federal Constitutional Court to court on the draft budget. And they had it rejected! And on energy, what do they want to do? Do they want to slow down the transition? Relaunch new sources of energy, such as nuclear power? Today, they are hiding behind the general discontent, but do they really have any plans? It is not obvious.
2 – The AfD, more than ever in ambush
After Thuringia and Saxony, the AfD has achieved a third place by coming in second in Brandenburg. Despite the scandals it has been the subject of, such as the debate on “remigration” last February, the far-right party has achieved historic scores, around 30% of the vote. One of the reasons for this success lies in the policy of territorial anchoring that this party has been pursuing for several years. In 2023, the AfD had thus succeeded in establishing itself in municipal councils during the local elections in Thuringia, and had almost taken over a major city. Let us recall that in Germany, voters vote twice: for a candidate in a constituency and also for a party. It is therefore not only because they are labeled AfD that these local elected officials are elected, but also for their own personality. Increasingly, they are becoming serious competitors in local elections. In this respect, the three elections that have taken place in recent months must be seen as a serious warning for next year.
3 – Immigration, a major debate in Germany
Immigration, a major topic, will be at the heart of the debates during the next federal elections. The debate on the expulsion of foreign criminals has increased following a number of tragic incidents involving migrants. After the knife attack in Solingen that left three dead on August 24, the ruling coalition urgently proposed a tightening of asylum law and new incentives to encourage asylum seekers to leave Germany. Border controls have even been re-established for a period of six months from September, to the great displeasure of European neighbors such as Poland. This is a taboo that is falling and an extremely strong political signal in Germany.
Another important question concerns the possibility of relocating asylum application procedures to a third country, like the British project in Rwanda or the “Italian model” in Albania. We can bet that German politicians will be very attentive to the solutions that will be found in other countries to get around the refusal of certain States to take back their nationals or to adjust European systems.
In the coming months, we can expect a conservative national alignment on this migration issue. With one caveat: given its demographics, Germany has a significant need for skilled labor. Aware of the economic challenges, politicians are emphasizing the urgency of controlling irregular immigration and systematically dissociating irregular migration from labor migration.
4 – The Ukrainian issue, explosive across the Rhine
Policy towards Russia has emerged as a campaign issue in the regional elections. The population is very sensitive to this issue, especially in the eastern states. Sanctioning Russia and treating it as an enemy has a particular impact in Germany, where a large part of the population, rather neutralist, says to itself: “We have lost Russian gas, life is becoming more and more expensive; it is not up to us to foot the bill for this conflict.” This state of mind is more pronounced in the east than in the west. In the three recent elections, the AfD and the BSW – the populist party founded by the far-left leader Sahra Wagenknecht – both campaigned against Berlin’s support for Kiev. Sahra Wagenknecht even stated that the BSW would not form a coalition with a party that supported military aid to Ukraine or the stationing of American missiles in Germany from 2026, the principle of which was enacted by the Scholz government. In February 2023, she launched a petition against the war with other personalities. It obtained more than 700,000 signatures.
5 – An economy battered by Chinese competition
Let us first discuss the energy transition, and above all, its implementation. For many Germans, particularly in the East, a greener economy means a loss of purchasing power and additional constraints. During the election campaign in Thuringia and Saxony, the AfD and BSW called for the resumption of supplies of “cheap” Russian oil and gas and the lifting of sanctions against Russia. This narrative takes on particular resonance in the period of economic stagnation that Germany is going through: the economy has barely grown since 2019 and everything suggests that this contraction is set to continue.
Then there are other, more structural elements. German manufacturers have built their excellence on technologies and products that are now highly competitive, such as machine tools, which now rely on new technologies and in which they have not invested much.
Then there is the extremely strong Chinese competition in the automobile and electric vehicle sectors. This is fuelling widespread concern about the fragility of the German economic model. The job cuts announced at the equipment manufacturer ZF Friedrichshafen and the restructuring underway at Volkswagen are fuelling social discontent. In this context, the postponement of the start of construction of the Intel plant in Magdeburg, announced a few days ago, has had a very negative effect.
Finally, there is the problem of the loss of competitiveness due to the cost of energy; the competition from the Inflation Reduction Act (IRA) in the United States, which encourages foreign producers to invest and develop in the American market on condition that they produce locally; and also the problem of German infrastructure, which suffers from chronic underinvestment. The share of gross public investment in German GDP was 2.5% between 2018 and 2022, the lowest among high-income countries, with the exception of Spain.
Berlin must admit that strict budgetary discipline is not an end in itself and that too rigid an attitude will not only hamper the investments needed to preserve the competitiveness of the economy but will also weaken the internal market. However, there is very little debate in Germany around these major issues, including within the CDU, which is nevertheless competent in economic matters. However, it is urgent to address them.
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