BERLIN — In Friedrich Merz’s telling, it’s not just his chancellorship that’s on the line — but the future of the German republic.
Merz and the leaders of his conservative-led government have vowed to agree on a series of urgent and long-delayed reforms on everything from the tax and pension systems to long-term care insurance in the coming weeks. The self-imposed deadline is intended to demonstrate that Germany’s ideologically divided coalition can come together to govern ahead of two elections set for September in states of the former East Germany, where the far-right Alternative for Germany (AfD) is far ahead in polls.
Both contests have taken outsized significance in Germany, where they’re widely seen not only as critical tests of the current government’s standing — but also of the resilience of German democracy 36 years after the country’s reunification. By the time voters go to polls in September, Merz says, his government needs to have shown that it’s capable of acting to restore economic growth and, more broadly, trust in the political mainstream.
“Time is running out,” Merz told lawmakers Thursday in the Bundestag. “In this legislative session, we want to renew the foundation of our country so that it will hold up again for many years.”
In a speech on Sunday before his Christian Democratic Union (CDU) colleagues in Mecklenburg-Western Pomerania, one of the eastern states where a vote will be held, Merz said only painstaking legislation that incrementally improves the lives of German citizens will serve to restore voters’ trust — not unrealistic promises of a great breakthrough or a “Big Bang,” as he put it.
Failure to “do our work,” he suggested, will result in a “Big Bang” of another kind: AfD victories in September.
“More is at stake than merely the future of a government,” Merz added. “The question is whether, from the political center of our country, we still have the strength, the will, and the capacity to tackle and solve the political problems that confront us today.”
The promised reforms will be a tall order given the unpopularity of Merz and his government. The AfD now holds a significant and growing lead over Merz’s conservatives in polls not only in eastern Germany, but also nationally, putting the government in a historically weak position as it endeavors to pass some of the most sweeping bills in decades.
In fact, the main factor keeping the chancellor’s struggling coalition of center-right conservatives and center-left Social Democrats intact is that the alternative — a collapse and a new snap election — could well lead to a far worse outcome for the governing parties: an AfD federal election win.
This is placing even greater pressure on Merz and other coalition leaders to turn things around while they still can. And they must do so at a moment when Germans’ economic anxiety — amid surging energy prices and accelerating deindustrialization — is at a level not seen since near the height of the 2008 global financial crisis, according to the benchmark DeutschlandTrend survey.
Much depends on whether coalition leaders can reach key agreements in the coming weeks. Even then, a bigger question remains: Will it be enough to restore optimism among voters ever-more anxious about their country’s economic future?
Saving Germany by the summer
The problem for Merz is that he may have already set up his coalition for failure by promising immediate results on longstanding problems that no recent government has dared to fully tackle.
German Chancellor Friedrich Merz and German Minister for Labour and Social Affairs Baerbel Bas (SPD) followed by German Finance Minister and Vice Chancellor Lars Klingbeil (SPD, back C) and Bavaria’s State Premier and leader of the conservative Christian Social Union (CSU) Markus Soeder (R) attend a press briefing on the results of their overnight coalition committee consultations. | Ralf Hirschberger/AFP via Getty ImagesThe coalition has repeatedly pledged to reach initial agreements on a series of thorny, far-reaching reforms — including tax cuts for middle-and-low income earners and stabilizing pension and long-term care schemes under increasing strain due to a rapidly aging population.
Merz had already promised breakthroughs on many reforms last year in what conservatives initially dubbed “the fall of reforms.” Those sweeping deals never materialized, however, but for an initial coalition agreement in April to curb spiraling health insurance costs, in part by cutting benefits.
Now coalition leaders have promised major initial agreements, if not actual draft bills, by the time parliament breaks for its summer recess on July 10. In recent days, however, Merz and others have again started to backpedal on the deadline, saying it might take months.
“It’s commendable that the federal government is tackling problems that have been left unaddressed for decades, but can all of this be accomplished at once?” Andreas Bovenschulte, the Social Democratic Party (SPD) mayor of Bremen, told German magazine Spiegel. “Tax reform, healthcare reform, long-term care, pensions, labor, energy — to put it mildly, that seems a bit much” to accomplish before the summer break.
The other problem for Merz is that many of the reforms would be politically difficult even for a popular and ideologically-united government. Making the pension system more sustainable, for instance, will require proposals to increase retirement ages and lower benefit payments, policies certain to anger much of the electorate.
But Merz doesn’t have a great amount of political capital to spend. So far, the coalition has largely avoided public confrontation over some of the most politically explosive issues, including the pension reform, by outsourcing initial proposals to expert commissions.
But with key recommendations due later this month, the ideological divide between the SPD — a traditional workers’ party likely to defend state pension guarantees — and Merz’s conservatives — who favor a major expansion of private pensions linked to capital market investments — is likely to come into sharper focus.
Still, SPD leaders say compromise is necessary to reassure German voters that the government can function effectively.
“Good governance builds trust,” Sebastian Roloff, an SPD lawmaker, told POLITICO. “If people initially feel that politicians are working seriously on reforms — albeit amid critical debate — and then, over time, they also feel and see the positive consequences of these reforms, it will at least become more difficult for fringe groups to discredit existing political structures.”
Lawmakers also want to offer some immediate reward to voters in the form of tax cuts to ease the pain of reforms in other areas. SPD Labor Minister Bärbel Bas said over the weekend that tax relief should amount to at least €500 for earners in order to “actually leave more money in your wallet.”
But it’s far from clear such a sum would be anywhere near enough to placate the 87 percent of Germans who say they’re dissatisfied with the government.
Channeling Merkel
Meanwhile, the opposition AfD is hitting the government hard on the inevitable sacrifices voters will be asked to make to stabilize the pension and long-term care systems, and depicts the coalition as prioritizing the welfare of migrants — whom party national co-leader Alice Weidel on Thursday called “Third World dependents” — over its own citizens.
Leaders of the AfD during a sitting of the German Bundestag (lower house of parliament) on June 11, 2026. | John Macdougall/AFP via Getty Images“German taxpayers and social security contributors are expected to pay higher pension contributions and work longer,” Weidel told lawmakers in the Bundestag. “They are expected to accept rising social security contributions in exchange for massive cuts to benefits, and, if they require long-term care, to put up all their assets and their homes — which they have saved for their entire lives — to cover the costs. Yet they are expected to foot the bill for the lifelong full support of millions of Third World dependents. That is all you need to know about this federal government.”
In his speech to conservative lawmakers in Mecklenburg-Western Pomerania Sunday, Merz sought to hit back against the widespread pessimism and dissatisfaction that is helping fuel the AfD’s rise.
He then borrowed a line from former German Chancellor Angela Merkel to make his point.
“Wir schaffen das!” or “we can do it!” the chancellor declared of the coalition’s reform push.
It was a politically baffling move. Merkel — long one of Merz’s greatest political rivals within the CDU — repeatedly uttered the line a decade ago in reference to Germany’s ability to absorb hundreds of thousands of asylum seekers entering the country during the refugee crisis. Merz has since sought to drastically cut the inflow of refugees, blaming Merkel’s approach for the rise of the anti-immigration AfD.
But as the AfD continues its rise under Merz’s reign, the chancellor is searching for fresh answers, and even a dose of Merkelian optimism.
“We Germans must finally leave behind our very German reflex of constantly talking ourselves down,” Merz said. “Let’s continue working together on this work in progress that is Germany.”