Germans punish Merz’s coalition amid economic and war fears

BERLIN — Chancellor Friedrich Merz often warns that Germany is living through deeply insecure times — and increasingly, it looks like his own government could become a casualty.

Merz’s ideologically divided government is under growing pressure to respond to rising anxiety in Germany over the country’s economic future as key manufacturing sectors decline and the fallout from wars in Ukraine and Iran mounts.

Merz’s coalition of conservatives and the center-left Social Democratic Party (SPD) is increasingly at odds over how to revive Germany’s stagnating economy. Both parties were defeated by the Greens in a vote in the state of  Baden-Württemberg on Sunday, and polls suggest further chastening losses are in store when voters in two eastern German states — bastions of the far-right Alternative for Germany (AfD) — vote later this year.

In Baden-Württemberg, where the AfD finished a strong third, Merz’s conservatives came up shy in their effort to recapture power in a state that was long a conservative power base, while the SPD, Germany’s oldest political party, suffered its worst election performance since World War II, coming in with a humiliating 5.5 percent. 

The election “was one of the darkest days I could imagine,” said Andreas Stoch, the SPD’s lead candidate in Baden-Württemberg. “To be honest, I never could have imagined standing in front of the press to announce a single-digit election result for the SPD.”

As political pressure rises, both the SPD and Merz’s conservative Christian Democratic Union (CDU) are being pushed to reframe a series of policies — from reforms meant to restore economic competitiveness to the government’s stance on the war in Iran — to appeal to their bases. That could well make the divergent coalition far more fractious.

Merz on Monday said his coalition will endure — less out of conviction, but more due to the inescapable political reality, calling it “the only option for a stable government” in the political center given the rise of radical parties. 

“I have already spoken with the two party leaders of the SPD, and we agree that we will, of course, continue the work of the coalition and that we will also try to shape this work in the interests of the country so that we can emerge from our country’s economic weakness,” he said.

There’s another electoral test coming in less than two weeks, in the the small southwestern state of Rhineland-Palatinate. Polling suggests the SPD and CDU are neck and neck in the race to win the state, and that the AfD is poised to more than double its support.

‘Not our war’

One of the major areas of disagreements between Merz’s conservatives and the SPD involves reforms intended to make the economy more competitive. While Merz’s conservatives are pushing for cuts to social spending, the SPD is under rising pressure to preserve the safety net in order to prevent the defection of what remains of its socialist base.

Germany’s constitutional spending limits are another area of tension. While the coalition partners agreed to loosen the rules for defense purposes, SPD lawmakers want to further relax them. Merz’s conservatives, however, reject that notion, and Merz doubled down on that position on Monday. “Further debt is out of the question,” he said.

Another issue that is increasingly dividing the coalition is Merz’s supportive stance on the U.S. and Israel’s attacks against Iran. The chancellor reiterated that support Monday.

“You know that Iran supports Russia in its war of aggression against Ukraine, that Iran is largely responsible for the terror of Hamas, that Iran is the center of international terrorism, and that this center must be shut down, and the Americans and Israelis are doing that in their own way,” Merz said.

The vast majority of Germans are against the strikes on Iran, according to surveys, and SPD lawmakers argue that the strikes are a violation of international law.

“I say very clearly: This is not our war,” SPD national leader Lars Klingbeil, who also serves as Germany’s vice chancellor and finance minister, said in an interview with RND over the weekend. 

In Baden-Württemberg, surveys suggest concerns about wars abroad fused with worries about the economy to generate a diffuse sense of anxiety. Almost three quarters (72 percent) of voters said they have “great concerns” about Europe’s security, according to a survey done for German public television, and more than half (56 percent) said they feared they wouldn’t have enough money in old age.

Perhaps most concerning for Merz’s government is that the AfD gained significant vote share in Baden-Württemberg despite facing allegations of systemic nepotism that threaten to shatter its self-styled anti-establishment image.

In the two states in the former East Germany where elections are to be held in September, the AfD is far ahead of all other parties in polls. The Russia-friendly party’s popularity in the East is partly driven by concerns over the Merz government’s support for Ukraine; in one recent poll carried out in four eastern German states, a majority of people said they believe that this support “goes too far.“

Merz has vowed that his conservatives will maintain their “firewall” around the AfD, refusing to govern in national and state coalitions with the far-right party. But AfD leaders believe that if they continue to gain ground by hitting Merz’s party on the economy, that firewall will crumble.

“If the conservatives get five bad results in a row, at some point the pressure will become so great that it will either lead to their destruction or the firewall will be gone,” said Marc Bernhard, a national AfD lawmaker from Baden-Württemberg. “The conservatives will have to make a move. That will be this year’s outcome.”