BS EDIT: Germany’s Options: A New Chancellor Faces Tough Challenges

By Business StandardPublished On Feb 25, 2025

A Divisive Election Outcome

Germany’s CDU-CSU won, but the far-right AfD surged to 21%. Mainstream parties vow to keep AfD out of power, but its influence is growing

A Shift from Merkel’s Era

Friedrich Merz’s leadership marks a move away from Merkel’s liberal policies. His strict anti-immigration stance and pro-business approach define his agenda

NATO and Defence Strategy

With US support for NATO uncertain, Merz is boosting defence spending and exploring European nuclear security ties with France and the UK

Climate Policy at a Crossroads

Merz supports renewable energy, but his party resists aggressive climate action. The push for a green transition faces industry opposition

Reviving the Economy

Germany’s economy shrank in 2024 and faces further decline. Merz aims to reduce reliance on China and expand trade with Mexico and Southeast Asia

Germany’s Biggest Test Yet

With economic struggles, rising nationalism, and shifting alliances, Merz faces a tough road ahead. Can he steer Germany through this storm?