Waiting for GroKo?

Germans are heading to the polls with a recent spate of violent attacks by migrants and a weak economy on their minds. The next government in Berlin must respond to these concerns and make next-generation decisions that will alter the trajectory and face of Europe’s largest economy.

The tasks ahead are well suited for a Grand Coalition, a governing majority of the Christian Democratic Union (CDU) and the Social Democratic Party (SPD). Germany’s two major parties could carry enough influence to push through needed big changes. Current polling points to such an outcome, but the “GroKo” has been a dreaded construct over the last few election cycles. It allowed Chancellor Angela Merkel to govern comfortably from the center for three of her four terms before it became sclerotic and opened the door for populist parties to emerge on both sides of the political spectrum.

The resulting political fragmentation may necessitate a return to a Grand Coalition. But that may be a good development if the two parties can join forces to make bold decisions that set Germany on a course for leadership on defense spending and economic innovation.

There is a realization among the Germans that their country is facing a new era. Merkel’s successor, Olaf Scholz, declared a Zeitenwende, or turning point, immediately after Russia’s full-scale invasion of Ukraine. Since then Berlin has been trying to strengthen its military posture and renew a stagnating economy. These ambitions have become even more acute as Germany’s defining relationship with the United States undergoes a profound shift. 

The second Donald Trump administration expects more defense spending but is also wielding tariffs while promoting, in the run-up to the election, the far-right Alternative for Germany (AfD). That party, supported by about 20% of the electorate, cannot be ignored, but it has cast itself out of the running to be a coalition partner. German authorities have deemed groups within the party to be extremist. AfD leaders have shrugged off Germany’s commitment to the memory of the Holocaust. 

CDU leader Friedrich Merz is poised to replace the SPD’s Scholz, but it will not be business as usual if their two parties form a coalition. Germany is confronting new realities. War in Europe, uncertainty in the transatlantic relationship, and a contracting economy will require pronounced and painful decisions. A GroKo may be again a last resort, but it will not be able to afford falling back on governing as if everything were status quo.