Germany’s political mess

Looking at the current polls, there’s no clear path to a functioning coalition in Germany. The three potential options are: CDU/CSU pairing with SPD – a move toward stability but lacking excitement; CDU teaming up with the Greens – a less likely scenario given weak polling and major ideological clashes; and finally, the Merz dream coalition of CDU/CSU and FDP, which remains far from reaching the crucial 50% mark. With all three options falling short, creativity (or desperation) might be the only way forward.

A coalition with the far-right AfD is off the table – Merz has made that abundantly clear. This means the FDP could end up playing kingmaker, either in a CDU/CSU/SPD alliance or alongside the Greens. Meanwhile, the AfD has surged to nearly 20% in the polls, reflecting the shifting political dynamics and deepening divisions within the electorate. The only viable coalition at the most recent polls from Forsa CDU/SPD/Greens – a far cry from what the CDU would ever wish for.

With elections slated for late February, Germany faces months of political gridlock, followed by potentially prolonged coalition talks. During this time, the German economy – already in need of urgent support – will be left to fend for itself. The lack of decisive governance will only deepen the challenges, leaving the country in a precarious position at a time when it desperately needs strong leadership.

Chart 1: Polls suggest a difficult time to find a new government in February 2025

Source: Wahlrecht.de, FT research