The election results are out, with the preliminary outcomes indicating a shift in the political landscape. The year 2021 and 2025 are significant markers in this shift, with different political parties gaining prominence.
Among the key players, we have the Social Democratic Party of Germany, the Christian Democratic Union of Germany, Alliance 90/The Greens, Free Democratic Party, Alternative for Germany, The Left, and others. Interestingly, the Christian Democratic Union of Germany has extended to include the Christian Social Union in 2025.
Coalition discussions have commenced, with Merz, a significant figure in the Christian Democratic Union, spearheading the conversations. Meetings with SPD leadership have been scheduled, and there are plans to interact with the departing Chancellor, Olaf Scholz. The goal is to have a new government in place by Easter, signifying a return to stability after the previous coalition’s downfall.
Merz has outlined three primary objectives for the incoming government: enhancing European defense in response to changing US foreign policy, addressing migration issues, and reinforcing Germany’s industrial foundation. He is convinced that the SPD, unlike the Greens, shares the CDU’s focus on preserving industrial jobs, especially in areas like Wolfsburg, the headquarters of Volkswagen.
The shift towards a CDU-SPD coalition signals a return to Germany’s grand coalition model, a system that saw Angela Merkel at the helm for 16 years. However, Merz’s leadership could tip the political balance towards the right. He sees the coalition as a shield against political instability, particularly with the rise of the far-right Alternative for Germany party.
Merz stressed the need for a functioning government with a parliamentary majority, viewing this election as a crucial opportunity to restore public faith. Interestingly, Merkel, his former political adversary, has not yet congratulated him on his electoral victory.
Regardless of political affiliations, these developments are of interest to investors and individuals keen on Germany’s political and economic landscape. While the primary aim of this article is not to provide investment advice, it offers valuable insights into the country’s political trajectory.
