The Numbers Tell One Story. The Economic Pressures Tell Another.

When Friedrich Merz’s CDU/CSU crossed the finish line in Germany’s February 2025 federal election with 28.6% of the vote, the headlines proclaimed stability. A centrist coalition. Predictability restored. But this framing misses the actual tension baked into the result, which becomes obvious the moment you ask: what does a center-right government do when it inherits both a weakened economy and a constitutional straightjacket? The German Federal Returning Officer Official Results showed a fractured electorate, not a mandate. Merz won by plurality, not conviction.

The underlying pressure is fiscal, not ideological. Germany’s constitutional debt brake limits new borrowing to just 0.35% of GDP in normal times. This rule exists for legitimate reasons rooted in postwar political economy, but it also means Germany cannot simply spend its way out of infrastructure decay, industrial competitiveness challenges, or military readiness gaps. Every euro spent on defense is a euro unavailable for schools, roads, or green transition investments. This is not abstract budget mathematics. This is competing necessities colliding in real time.

So when Merz immediately signaled that defense spending would not merely meet NATO’s 2% target but potentially exceed 3% of GDP, he was not making a casual campaign promise. He was choosing a constraint. That choice cascades through everything else Germany might want to do over the next five years.

The SPD Collapse and What It Reveals About Voter Realignment

Olaf Scholz’s Social Democrats finished with 16.4% of the vote. For context, this is the worst federal election result for the SPD since 1933. Let that sink in. The party that helped rebuild West Germany, that represented labor and the welfare state for generations, now polls behind the Greens. The reasons are both obvious and instructive about how voter behavior reflects economic anxiety rather than pure ideology.

The SPD hemorrhaged support in two directions simultaneously. Working-class voters with lower education moved toward the AfD, attracted by nationalist messaging and skepticism toward immigration. Younger, urban, educated voters drifted toward the Greens and, surprisingly, toward non-voting altogether. This is a classic realignment pattern. When a centrist party in power cannot deliver tangible improvements in living standards, when inflation persists, housing remains scarce, and energy prices stay elevated, voters do not blame abstract market forces. They blame the government. The SPD had no compelling story to tell about why things were getting better.

Scholz’s attempt to manage the Ukraine crisis while also managing Germany’s energy transition while also controlling inflation while also respecting the debt brake created a political triangle with no viable solution. Something had to give. What gave was the SPD’s electoral base.

The AfD’s Historical Threshold and the Democracy Question

The Alternative for Germany captured 20.8% of the vote, the strongest showing for a far-right party in a German federal election since 1945. This number requires careful analysis rather than panic or dismissal. The AfD’s voters are not monolithic. They include genuine fascists, certainly, but also economically distressed small-business owners, former industrial workers, farmers frustrated with EU regulations, and voters responding to genuine failures of center-left governance. The AfD’s success reflects real political space. How Europe handles that matters.

What is crucial here is what happens next. The CDU/CSU and other mainstream parties have essentially cordoned off the AfD, refusing coalition participation. This is both democratically necessary and politically tricky. It says the AfD is beyond the pale. But cordoning a party while ignoring its voters’ grievances is a recipe for long-term instability. Real wages in parts of eastern Germany have stagnated. Youth unemployment in some regions remains elevated. Small manufacturers are squeezed by both Chinese competition and German energy costs. These problems are real. The AfD offers bad solutions. The center-right and center-left have offered incomplete ones.

European politics in 2025 sits in a strange place where right-wing parties thrive by exploiting genuine failures of centrist management, not through ideological superiority but through credibility gaps.

The NATO Spending Commitment: Merz’s Bet and Germany’s Constraints

Here is where political economy gets genuinely complicated. Merz committed to pushing Germany’s defense spending beyond NATO’s 2% guideline, potentially reaching 3% of GDP or higher. On one level, this makes strategic sense. Russia remains militarily active in Ukraine. Poland, the Baltics, and other NATO members feel genuinely threatened. Germany’s military has experienced decades of underinvestment. A stronger German military contributes to collective security.

But Merz is making this commitment precisely when Germany faces serious competing pressures. The country must invest in manufacturing competitiveness to keep pace with America’s subsidized green industry and China’s industrial capacity. It must upgrade crumbling infrastructure. It must fund pensions as the population ages. It must manage the ongoing transition away from Russian energy dependency. The debt brake makes doing all of this at once impossible.

The NATO Defense Spending Targets Explained are expressed as guidelines, not hard rules, which gives countries some rhetorical flexibility. But the political commitment Merz has made is real. He is betting that Germany’s industrial base can handle both a military rebuild and industrial competition, or that he can convince voters to accept tradeoffs in welfare spending. Neither is a safe bet.

What This Means for European Architecture

The 2025 German election did not just reshape German politics. It shifted the center of gravity in European decision-making. With a CDU/CSU-led government committed to higher defense spending and more assertive NATO positioning, Germany becomes a more active security player rather than an economic manager reluctantly dragged into strategic choices. This aligns Europe’s largest economy with Poland’s preference for stronger deterrence, with the Baltics’ security concerns, and with American expectations that European NATO members invest seriously in defense.

Yet this alignment comes at a cost Germany may not have fully priced. The 20.8% who voted AfD and the additional voters disillusioned with centrist management are watching. If Merz prioritizes NATO spending while wages stagnate and housing remains unaffordable, the cordon around the far-right becomes more porous. European political stability over the next five years depends partly on whether Merz can thread this needle: committing to collective security while also addressing the real grievances that fuel anti-establishment politics.

The February 2025 election was not about choosing between two fully formed visions of Germany’s future. It was about inheriting constraints and deciding which pressures to defer. That is the actual politics of centrist governance when multiple crises arrive at once. What aspects of this realignment do you think will matter most as the new German government settles in? The defense spending question? The SPD’s path to recovery? The question of whether the AfD remains cordoned off?