Germany's Merz vows to hold ruling coalition together after election gains by far right, hard left

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Published: 2026-09-21T13:11:21.500Z • Permanent link

Friedrich Merz, the German Chancellor, has vowed to maintain the stability of his ruling coalition, comprising the centre-right Christian Democratic Union (CDU) and the centre-left Social Democratic Party (SPD). The announcement came after the far-right Alternative for Germany (AfD) and the hard-left Left Party gained significant ground in the recent election. The AfD secured 12.6% of the vote, up from 12.6% in the 2017 federal election, while the Left Party won 10.7% of the vote, a notable increase from 9.2% in 2017. The AfD's surge has raised concerns about the potential fragmentation of German politics.

Merz's decision to prioritize coalition stability is driven by the need to address pressing economic and social issues. Germany's economy, the largest in the European Union, has been facing challenges such as low birth rates, aging populations, and a decline in global competitiveness. The SPD, led by Saskia Esken, has been pushing for greater investment in social programs and climate action, while the CDU, under Armin Laschet, has been advocating for more fiscal discipline and economic growth. Merz's commitment to maintaining the coalition demonstrates his willingness to compromise and find common ground to address these pressing issues.

Merz's coalition has been facing increasing pressure from both the AfD and the Left Party, which have been gaining traction among younger voters and those feeling disillusioned with the current political establishment. The AfD's rise has been fueled by concerns about immigration, security, and the European Union, while the Left Party has been pushing for more radical social and economic change. Merz's decision to hold the coalition together may be seen as a pragmatic response to these challenges, but it also risks alienating voters who feel that the current system is too entrenched and resistant to change.

The stability of the CDU-SPD coalition has significant implications for the German economy and politics. The coalition has been a key driver of Germany's economic growth and stability, and any disruption to the government could have far-reaching consequences. The AfD's rise has also raised concerns about the potential for increased nationalism and protectionism, which could have negative impacts on Germany's global trade relationships and competitiveness. Research communities, policymakers, and business leaders will be watching the situation closely, as they seek to understand the implications of a more fragmented German politics.

The impact on the German economy will also be felt in the markets. The DAX, Germany's flagship stock index, has been volatile in recent months, reflecting investor concerns about the country's economic outlook. A more stable government could provide a boost to market confidence, while a breakdown in the coalition could lead to a sharp decline in the DAX. Companies such as Volkswagen, Siemens, and Bayer, which are major contributors to the German economy, will be watching the situation closely, as they seek to understand the implications of a more uncertain political environment.

The German election results have been seen as a significant development in a broader pattern of increasing polarization and fragmentation in European politics. The AfD's rise has been part of a wider trend of far-right and far-left parties gaining traction in countries such as Italy, Hungary, and France. The Left Party's success has also been fueled by concerns about climate change, inequality, and social justice, which are increasingly resonating with younger voters and those feeling disillusioned with the current political establishment.