Chancellor Merza's "Autumn Reforms" could turn into a period of coalition disputes. He wants to implement his ambitious plan to improvement the German welfare state, while besides introducing taxation reforms aimed at revitalising the country's economy.
Serious challenges
The challenges are serious: the economy faces a 3rd year without GDP growth, the German welfare state and its pension strategy do not keep up with demographic challenges, and the national budget shows a gap of around € 172 billion for the period 2027–2029.
In addition to the immense number of tasks alleged "Autumn of Reforms" Merza will most likely meet with opposition from the centre-left Social Democratic organization of Germany, and the Chancellor wants to avoid friction in the government. He is well aware that any discrepancy within the coalition, specified as the 1 concerning the national Constitutional Court justice at the beginning of this summer, makes his government resembles an eternally divided and very critical government of Olaf Scholz, which fell last year before the end of his first full term.
However, compromise is not the Chancellor's style. Last weekend at the regional centre-right convention of the Christian-Democratic Union from Lower Saxony, he gave vent to his more militant instincts, addressing a coalition partner and delegates from his party: "If the SPD has the strength to critically approach immigration and has a friendly attitude towards manufacture at the same time, this organization besides has the chance to gain a bridgehead in government, participate in it and push reforms in the country in the right direction."
Merza dilemma
Of course, this was met with the affirmative reaction of the conservative CDU base, which expressed discontent as early as March, erstwhile Merz pressed on Parliament to destruct the sacred cattle of all German conservatives, or a public debt brake. This was to enable immense fresh loans to be drawn to finance defence and infrastructure projects.
– Since then, the CDU database has been annoyed – says Oliver Lembcke, a political scientist from the University of Bochum. Merz's basic dilemma – whether to satisfy the organization base or keep a coalition with SPD – is not easy to solve. According to the expert, this is almost impossible.
– I don't think he can truly solve it," he said in an interview with DW. – For better or worse, it is dependent on the SPD, due to the fact that mathematically there are no another majority in parliament.
The CDU ruled out a coalition with 2 another parties represented in the Bundestag – an utmost right-wing alternate for Germany and the Left party. Therefore, the SPD, led by Finance Minister and Vice Chancellor Lars Klingbeil, actually has the right to veto against Merz and the CDU.
Social cuts or taxation cuts?
The budgetary solutions active are highly complicated. Friedrich Merz and Lars Klingbeil hope that, thanks to taxation increases in any areas, cuts in social benefits in others, and possibly an increase in retirement age, the government will be able to balance the state budget without annoying besides many different groups in society.
Merz argues that the current social strategy can no longer be financed, but has already made concessions towards a conservative Bavarian CDU ally, a Christian-Social Union (CSU), which will cost you more money, specified as expanding "maternity retirement" and a redeveloping sales taxation for the catering industry.
For its part, the SPD wants to solve Germany's budgetary problems by expanding taxes for the richest. According to political scientist Ursuli Muench, manager of the Tutzing University of Political Education in Bavaria, there is simply a compromise that includes both taxation reductions and cuts in unemployment benefits.
– I presume that there will be no another option than to step down the SPD on the taxation of the highest incomes and then anticipate any concessions from the SPD," Ursula Muench said in an interview with the DW.
Merz is neither Scholz nor Merkel
All of this is embarrassing for the Chancellor, who does not dress in words and is happy to present himself as a strong leader. 1 of the reasons why he was elected president of the CDU in 2022 was that he was seen as a man speaking plainly and expressing himself more clearly than the erstwhile Chancellor of the CDU Angela Merkel, as well as his little-talk predecessor of the SPD Olaf Scholz.
– This may be his asset – Oliver Lembcke considers: "We see this in his abroad policy, where I think he gained importance in a comparatively short time. He is 1 of the leaders, or possibly even a leader, erstwhile it comes to expressing a European position towards the US."
The American president seems much more fond of Merz than his predecessors: after their first gathering at the White House, Donald Trump said of Merz: "He is simply a very good interlocutor, he is difficult, but he is besides a large German representative."
Although Merza's kind can work internationally, Oliver Lembcke believes that in his country he frequently appears as a "empty gesture". – He says any harsh words, like last weekend, and on Monday his coalition partners say, "Are you trying to blackmail us? We can do it too," DW said. As a result, as frequently happens, he must yet find any compromise.
Retrieving voters
Oliver Lembck's analysis seems to be reflected in the polls of German public opinion, which showed that Merz's popularity had increased in June, at the time of his first visit to the White House, but has declined since then: in the Deutschlandtrend poll conducted in August, Merz's satisfaction with politics fell to just 32 percent – by 10 percent points compared to the erstwhile month. About 2 thirds of Germans (65 percent) expressed discontent with Merz's work.
Given the challenge that Merz has posed himself as part of the "Autumn Reforms", it will not be easy to recover this electorate. In addition to conventional CDU voters, dissatisfied with the massive fresh public debt, both CDU and SPD voters are disappointed that the plans for reducing electricity taxes that he has promised were not implemented for households and tiny and medium-sized enterprises.
CDU and SPD are in the "weak coalition"
The SPD is now in an even weaker position than the CDU, and fresh polls only give it 15 percent support. It remains far behind the CDU and the far-right alternate for Germany (AfD).
Perhaps the only asset of the government is the good relation between Merze and Klingbeil, who reportedly had good working relations. “It’s the only thing that truly works well in government,” says Oliver Lembcke, “because they both actually have a very akin problem.”
The SPD base, which in full is more left-wing than its leadership, is dissatisfied with Klingbeil's decision to hold the function of organization co-chair and his silence on the hard immigration policy of the government.
Therefore, both Merz and Klingbeil are happy to emphasise the request for compromise. This plan is "difficult for social democrats, but besides for us and I do not make it easy for them", as Merz said in his speech in Lower Saxony. "But my appeal is to all of us: let us show together that change is possible, that improvement is possible," he added.
Will that calm the CDU members, that's another matter. Ursula Muench believes that members of both parties, CDU and SPD, must realize that they are stuck in the "weak coalition". "The CDU is not strong and the SPD is even weaker," she said in an interview with the DW. – They must realize that maximum demands will not bring them any good. Whether German public opinion likes it or not, the compromise seems to be the only way forward – even if it yet does not satisfy anyone – she stressed.
