Published 16.45
Germany suffers from the EU’s most expensive health care, stagnant growth and a pension system that is considered to be in urgent need of reform.
The government is plagued by internal battles, while the right-wing nationalist AFD reaches record levels in public opinion.
– Despite just over a year with a new government, not much has happened, says political scientist Ann-Kristin Kölln.
The pension system, income tax, the labor market, healthcare and bureaucracy. A stated ambition of German Chancellor Friedrich Merz (CDU) and his coalition government with the social democratic SPD since the 2025 election has been to agree on a series of reforms.
The German welfare state is in need of changes in several areas – and it is urgent.
– They need to get something done, says Ann-Kristin Kölln, professor of political science at the University of Gothenburg, about Merz’s government coalition.
– A new government was supposed to implement “an autumn of reforms”, but nothing major happened then, and now we are in the month of June.
Test for democracy
Ann-Kristin Kölln does not believe that any revolutionary changes are to be expected before the Bundestag goes on summer break at the beginning of July. However, the coalition’s latest tactics, with negotiations in smaller groups and fragmented reform proposals, may bear fruit.
– You will agree in some way. It’s about give and take.
Parallel to the bickering in the government, the right-wing nationalist Alternative for Germany (AFD) has gained ground in public opinion. After last year’s election, when the traditional major parties CDU/CSU and SPD only barely managed to get a majority, Markus Söder, head of government in Bavaria and leader of the Merz Christian Democrats’ sister party CSU, called the grand coalition “democracy’s last bullet”.
– The best thing that the German government can do now is to deliver policy and show action. It can also be a good strategy to respond to growing support for AFD, says Ann-Kristin Kölln.
Political deadlocks
There are many knots that Merz’s government must unravel at once. The chancellor himself has called the current situation in Germany “the most challenging since the Second World War”.
The German economy is stumbling – something that Merz has promised to change but where few concrete results have been presented. In terms of GDP, Germany’s economy is still the strongest in Europe, and the third largest in the world, but it has struggled since the pandemic. High energy costs, fuel prices and increased competition from China have hampered the export-dependent economy.
Last spring, Merz economic advisers wrote down the growth forecast for 2026 to 0.5 percent.
– This means that there is very little money in the system to use for the reforms that are promised. For the third year in a row, they have tried to speed up growth, the previous coalition also did not find a good solution.
Merz’s political style has also been subject to debate.
– There are those who say that he needs to focus much more on domestic politics. Another criticism that Merz often receives is that he lacks tact in his rhetoric. He can express himself impulsively and in certain situations can be perceived as condescending, says Ann-Kristin Kölln.
Great management for AFD
At the same time as the government works out compromises, several state elections await. In Saxony-Anhalt, the AFD looks to be making great strides and could even win its own majority in September.
The right-wing nationalist and pro-Russian party is deemed to pose a security risk for Germany. The country’s constitutional protection (BFV) has concluded that the party opposes the “freely democratic basic order”.
– There is a risk that AFD will change the state apparatus in Saxony-Anhalt, that they will follow Trump’s example and replace officials or abolish parts of the region’s institutions. They could also try to withdraw the subsidy for public radio and television, says Ann-Kristin Kölln.
The party’s rapid rise has brought the question of democracy to the fore in the debate.
– We know from research that support for democracies and democratic legitimacy is often driven by performance. If politicians do not deliver on what citizens demand and want, support for democracy decreases, says Ann-Kristin Kölln.
Complicated parliamentary situation
Germany has been governed since May 2025 by a coalition between Christian Democrats (CDU/CSU) and Social Democrats (SPD).
In the February 2025 election, the SPD fell sharply, with its worst result (16.4 percent) since the 1880s. The Christian Democrats and their Bavarian sister party CSU advanced compared to the 2021 disaster election, but to levels (28.6 percent) well below results in previous elections since German reunification.
The fringe parties, the right-wing nationalist AFD and the left-wing party Die Linke, both advanced strongly, while the Greens fell back significantly.
The distribution of mandates in the Bundestag barely made a broad so-called grand coalition possible.
The next election to the German Bundestag is scheduled to be held in 2029.
