Germany elections: Keir Starmer loses a political soulmate but might gain a more useful ally

In 2021, Olaf Scholz became chancellor of Germany as the seemingly never-ending reign of Angela Merkel ended. But his coalition – of his social democrats, allied with more foreign policy and climate hawkish Greens and more fiscally hawkish liberals in the FDP – had been struggling for some time. 

Germany has been afflicted by stagnant economic growth, hit by declining demand from China for the products of its Mittelstand and rising energy prices as it weaned itself off its addiction to cheap Russian gas. This was added to dissatisfaction with the household impacts of the green transition and even more discontent with levels of inward migration, the latter brought into sharp focus by sporadic violent attacks which fuelled support for parties offering tough border controls. 

Now, after the weekend's German elections, Scholz is on the way out. The rejection of all three coalition parties by the voters (big vote losses for the SPD and Greens and ejection from the Bundestag for the FDP, who failed to reach the five per cent hurdle) is a warning of the difficulties incumbents face if they cannot deliver growth nor convince on migration control. 

Germany will have a new chancellor – eventually

In switching off their Traffic Light coalition, German voters will now have a new chancellor who will likely head another “Grand Coalition”. 

Germany is now in what is known as the “Zwischenphase” – literally “between phase”. Scholz continues as chancellor until a new coalition forms on the basis of a very long and detailed programme for government. CDU chancellor candidate Friedrich Merz is aiming to conclude negotiations with the SPD by Easter (late April), though he would like to go faster if possible. In the interim Scholz has said that he will consult with Merz on decisions that need to be made (though will leave the negotiations to others), but for now the biggest economy in Europe is set to spend a chunk of 2025 in political limbo. 

Merz’s Trump scepticism may make him more enthusiastic about the UK

Merz has a reputation for being outspoken – and he livened up the post-election TV discussion between party leaders straight after the election by unveiling his fury at the new US administration’s boosting of the AfD, the far-right party which is regarded by all mainstream German parties as untouchable. The dominant political force in former East Germany came second in the election, with AfD leader Alice Weidel arguing that German voters wanted a “blue-black” coalition of the AfD and the CDU – which she said was the only government that could deliver the border control they wanted. But they are also Russia apologists, with some senior AfG figures questioning German membership of NATO. 

However, the bigger question mark over NATO came not from the AfD but from Merz himself. In an unexpected outburst on Sunday night, he made the case that Europe had to strengthen its defences to make it independent of a US who was “indifferent to the fate of Europe”. Merz has put himself firmly in the camp of higher defence spending but gone further than other European leaders in calling out the Trump administration. 

That suggests that Merz would see Germany as a big defence player – and has said in the past he is keen to see a more ambitious defence and security cooperation between the UK and EU (that may extend to facing down the French if they tried to resist progress on defence until fishing quotas were agreed). 

Merz may see the Brexit reset as an opportunity 

Beyond defence and borders, Merz will know that he has to solve the problem of low German growth (his answer to the AfD is that support for these parties is a symptom of unsolved problems, and the way to defeat them is to solve those problems). Having already criticised the EU’s failure to offer David Cameron enough concessions to keep the UK in the EU, it may be that he is prepared to put some impetus behind the Brexit reset – as long as that can be done in a way that does not give succour to EU sceptics within Germany. However, the Germans do not see tech regulation as an area which can be hived off from wider security and economic relations – which complicates Starmer’s position. 

The UK government will have to begin to build relationships with a new German government which will probably stay in power for the rest of its time in office, and if Starmer opts to get closer to the US then he may limit his options with the EU. He may yet decide that Friedrich Merz is a leader more receptive to working with the UK