Merz wants to be Europe’s Carney

John Kampfner is a British author, broadcaster and commentator. His new book, “Braver New World,” will be published in April. He is a regular POLITICO columnist.

“The old order is unraveling at breathtaking pace,” said German Chancellor Friedrich Merz, speaking to the great and good at Davos as they frantically assessed the multitude of storms whipped up by U.S. President Donald Trump. The world has entered a new era built on brute force, and “it’s not a cozy place,” he declared.

As far as appearances go, the speech was pretty good, delivered in the near-impeccable English of a man who spent many years with U.S. financial institutions. Yet Merz was still overshadowed by Canadian Prime Minister Mark Carney, whose own speech about the West’s “rupture” was hailed as epoch-making.

Not to be outdone, a few weeks later Merz insisted to the Munich Security Conference’s organizers that he wanted to break with convention and give the opening address. With everyone fearing a repeat of U.S. Vice President JD Vance’s menace the year before, the chancellor took it upon himself to try and galvanize. His message: The world order is over; European complacency is over; but at the same time, Europe won’t apologize for its values. It was a speech that stiffened the sinews for what was to come.

Make no mistake, Merz doesn’t have the charisma of other leaders. But as Germany approaches the first anniversary of the elections that ushered out the anemic Social Democrat-led government of Olaf Scholz, it may well be that in this new chancellor, the country has found the leader Europe needs for these darkened, hardened times.

Merz is no Carney — but the two may have more in common than they realize. A former central banker, Carney certainly looks the part of the leader he’s become, but that wasn’t always the case. In early 2025, staring into an abyss, Canada’s Liberals decided to dump then-Prime Minister Justin Trudeau. Then, just weeks after taking over, Carney called a general election and, against the odds, defeated populist conservative Pierre Poilievre. 

The person he really had to thank, however, was the incoming president south of the border who, after just a few months in office, had already vowed to absorb Canada as the 51st U.S. state. These are trying times for those who refuse to kowtow to Trump, but for Carney, they appear to be paying dividends — his approval ratings are now at their highest since he took office in March 2025.

So, might the same happen to fellow centrist and ally Merz? 

Unfortunately, there are a lot of things working against the German leader. For one, his party’s polling ratings remain doggedly low. The first poll of 2026 showed the far-right Alternative for Germany (AfD) extending its overall lead to 27 percent of the vote, while Merz’s Christian Democratic Union (CDU) came in at 24 percent. The chancellor’s personal popularity remains in the doldrums as well, as only 23 percent satisfied with him, and even among CDU supporters, only just over half approve of their own leader.

Then, there is the fact that steadfastness in dealing with Trump’s vagaries — not to mention Russian President Vladimir Putin’s and Chinese President Xi Jinping’s — doesn’t necessarily insulate one from disenchantment back home. Something British Prime Minister Keir Starmer and French President Emmanuel Macron are finding out to their cost.

For sure, Merz faces headwinds: Economic growth is forecast at around 1 percent in 2026 — which is better than the anaemic 0.2 percent of 2025 but still a far cry from the powerhouse of old. Consumer spending remains stubbornly low, and insolvencies are at their highest in a decade.

In a letter to his party at the start of the year, Merz wrote that the economy was in a “very critical state.” The coalition, he said, would “have to concentrate on making the right political and legal decisions to drastically improve the economic conditions,” and that labor costs, energy costs, bureaucratic hurdles and tax burdens are all too high. “We will need to work on this together,” he concluded. But his coalition is struggling to do so, turning the much-vaunted “Autumn of Reforms” into a damp squib.

Moreover, many of the changes Merz would like to introduce — his latest bugbears are part-time work and Germans’ propensity to call in sick — are fiercely opposed by his coalition partners, the Social Democrats (SPD), which continue to cling to the welfarist view of yesteryear.

In any case, Germany’s problems go even deeper: Putin’s invasion of Ukraine exposed an overreliance on Russian gas, which has proven rather expensive to move away from. Trump’s tariffs compromised Germany’s export-driven model. And now China’s overtaking Germany in several sectors it once provided a willing market for — notably cars.

One thing working in Merz’s favor, however, is that compared to the far more embattled Starmer and Macron, he at least has money to spend.

Of course, it’s not all perfect: Statistics for 2025 show the government’s been struggling to implement its plans to inject half-a-trillion euros into infrastructure over the long term, and there’s considerable concern over how this money will be spent. The Council of Economic Experts, which provides independent advice to ministers, has warned the government is at risk of “squandering” its investment, as it’s been using too much of the new funds to pay for pensions and social spending.

But that’s a nice problem to have compared to others in Europe. 

Finally, one date in the diary is filling Merz — and the leaders of Germany’s other mainstream parties — with trepidation: Sept. 6, when voters in the eastern state of Saxony Anhalt cast their ballots.

One of the quirks of German politics is that the country’s in a permanent state of electioneering, with several regional elections per year. And ahead of the Saxony Anhalt vote, the AfD is currently at around 39 percent, with the CDU trailing at 26 percent, followed by the Left Party at11 percent, and the once-mighty SPD hitting rock bottom at 8 percent.

If the eventual results broadly reflect current predictions, one of two options will come to pass: Either the CDU will be forced to cobble together an unwieldy coalition with parties it has almost nothing in common with, or the AfD will secure an outright majority, and in so doing, control its first regional parliament and get a seat in the Bundesrat upper house. This would, in turn, rekindle the fraught debate over the “firewall” — i.e. the main parties’ refusal to include the AfD from government at any level.

Still, these elections are seven months away, and seven months in MAGA mayhem is a long time. Trump’s threats to take over Greenland even caused far-right parties across Europe disquiet, impelling some to criticize him, and nonetheless discomfiting those who didn’t.

So, might voters begin to tire of all the disruption as the economy slowly cranks into gear? That’s his hope. It’s a distant one, but there’s a chance that what helped Carney could help him too.