Germany Has a New Chancellor: Friedrich Merz
Anna Toso | 20 May 2025
Summary
Elected in the second voting round at the Bundestag, Friedrich Merz became the 10th German Chancellor, leading a diverse coalition that unites centre-right and centre-left forces.
Merz’s first diplomatic exchanges and ministerial appointees underscore that foreign policy, defence, and the energy industry are the new government’s top priorities.
During the next NATO summit in June 2025, Germany and the US will highly likely hold high-level diplomatic talks to discuss trade and defence.
On 6 May 2025, Friedrich Merz became the 10th Chancellor of Germany. He was elected in the second round of secret ballots at the Bundestag with 325 votes. He heads a coalition between his centre-right union of Christian Democratic Union (CDU) and Christian Social Union (CSU), and the outgoing centre-left Social Democratic Party (SPD). CDU and CSU won 28.6% of the votes, while SPD scored 16.4% in the February federal elections. The new SPD leader, Lars Klingbeil, has been appointed as Deputy Chancellor and Finance Minister. Despite holding 326 seats in the German Parliament, where the majority threshold is 316 votes, the new coalition fell short by 6 votes to elect Merz in the first round.
This unexpected hiccup reveals the diverging interests within the coalition. Fundamental compromises prolonged and complicated post-electoral negotiations. CDU conceded SPD’s requests for infrastructural investments but required social spending cuts. The new administration’s top priorities include security, economy, and immigration. A strong focus lies on foreign policy and Germany’s international and geopolitical standing. Accordingly, the new Foreign Affairs Minister, usually appointed from among the smaller coalition parties, is Merz’s long-time advisor and CDU member Johann Wadephul. This outward-looking strategy might aim to divert public attention from domestic challenges, such as a potentially fragmented coalition and the strong opposition of Alternative für Deutschland (AfD), which leads the most recent national political polls in a tie with CDU/CSU. Nonetheless, AfD is subject to ongoing legal proceedings investigating its possible classification as an extremist party.
Regarding security, this administration will increase military expenditure and reinforce the national defence strategy. The plans include alignment with the ReArm Europe initiative, full support to Ukraine, and closer cooperation with its European allies. Merz committed to pursuing strategic autonomy from the United States' (US) military support amid a highly volatile Trump administration. Notwithstanding, when Merz met NATO Secretary General Mark Rutte on 9 May in Brussels, he expressed a more optimistic outlook, with prospects of meaningful cooperation among all allies at the upcoming NATO summit in The Hague, 24-25 June.
Evidence of a pragmatic and cooperation-oriented foreign policy also emerges from Merz’s willingness to revive the “Weimar triangle,” the alliance between Germany, France, and Poland first established in 1991. Merz met both the French President Emmanuel Macron and the Polish Prime Minister Donald Tusk a day after his confirmation as the new Chancellor. The most crucial discussion point with the latter was migratory policy: the two leaders agree on a tougher stance against irregular immigration, espousing the Dutch-Danish-Italian initiative to tighten EU Asylum and Migration laws. Capitalising on the public sentiment reflected in the rising consensus for the anti-immigration AfD, Merz intends to implement an immigration policy that strictly limits the crossing of the German borders and sets a cap of 100,000 refugees Germany will accept yearly.
This plan is criticised for human rights violations, with potential forced pushbacks and blocked family reunifications. Additionally, it is not welcomed by the Polish Prime Minister, who advocates handling migration at the EU external frontier rather than at the Polish-German border.
During Merz’s meeting with Macron, both pledged alignment and cooperation extended over various areas. For example, the two countries will invest in cross-border infrastructures and jointly push for different forms of low-carbon solutions for a climate-neutral, competitive, and sovereign European market and energy policies. Specifically, France will focus on nuclear, and Germany plans to build 20 additional gigawatts of natural gas-powered energy plants by 2030. Underscoring the strategic importance of the energy sector for the new German government, Merz nominated Katherina Reiche as Economy and Energy Minister, who has a decade-long experience in the energy industry. Limited public finances might obstruct ambitious investment plans, given the slight economic recession that has affected Germany for the last two years and the increasing defence expenditure. Changes to the country's orthodox spending regime have already included an unprecedented constitutional “debt brake” reform, primarily focusing on defence spending, approved by Bundestag and Bundesrat in March 2025. The lifted brake applies to all public investments with costs exceeding 1% of the national GDP, in particular defence spending and domestic infrastructure building.
Moreover, American tariffs hit German trade with the US, the largest importer of German goods, purchasing 10.4% of Germany’s exports. Merz pledged to abolish reciprocal EU-US tariffs over a call with US President Donald Trump, pushing for a “down-to-zero” approach instead of an escalation. In line with the stance of France and Italy, the new Chancellor favours an EU-wide unitary agreement over fragmented bilateral deals. A strong alignment between these influential countries will be necessary to get other, less condescending Member States and the Atlantic counterpart to sign such an agreement.
NATO North Atlantic Treaty Organization/Flickr, CC Y-NC-ND 2.0
Forecast
Short-term (Now - 3 months)
At the NATO summit in The Hague on 24-25 June, high-level diplomatic talks between Germany and the US will likely happen, given Merz’s optimistic attitude shared in the press conference after he met Rutte.
Merz will likely push for an EU-wide free trade agreement with the US, which is, however, unlikely to happen in the short term due to the absent unitary stance among all EU Member States and Trump’s unpredictability.
Medium-term (3-12 months)
Combined investment plans with France will highly likely be signed in the upcoming months, pursuing the improvement of cross-border energy infrastructures and cooperating on technologies that will support the shift towards a low-carbon power supply in Europe.
There is a realistic possibility that the diverging opinions among the governing parties will show through while tackling domestic challenges such as immigration and the relations with AfD. More evident internal fragmentation would likely require the coalition to scale down its ambitions in foreign affairs.
