Key takeaways from the 2025 German election results

Friedrich Merz, chancellor candidate of Germany’s Christian Democrats after German elections

(Image credit: Maja Hitij/Getty Images)

Three things emerged clearly from Germany’s general election, says The Economist.

First, the opposition conservative Christian Democrats (CDU), along with their Bavarian sister party, the Christian Social Union (CSU), won a definite if “underwhelming” victory with 29% of the vote.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Third, the “extraordinary turnout” of 83%; the highest figure since German reunification in 1990.

The popularity of the AfD, particularly among younger voters, is largely attributable to a desire for a “stricter approach” to immigration, fuelled by a series of lethal attacks involving foreigners, says The Times. In 2015, Angela Merkel “threw open the doors” to more than a million Syrian refugees.

What's next for Germany?

The combined vote for the CDU and AfD reveal that Germany’s “clear preference” is for a rightwing government, says The Telegraph.

Yet since Merz has ruled out a partnership with the AfD (regarded by many as a neo-fascist entity), the most likely outcome is a two-party coalition between the CDU/CSU and the SPD, a “discredited party of the left” – a return to the “grand coalition” that was in place for three of Angela Merkel’s four terms.

Geopolitical and economic realities should help expedite coalition talks. Added to immigration concerns is anxiety about security in the face of Russia’s expansionism and America’s “strategic retreat”, says The Times.

Merz wasted no time in heralding a new era in Europe, calling for the immediate strengthening of Europe’s defences to establish “real independence” from the US. Recently, he suggested that he would look to France and Britain to replace US nuclear guarantees.

For all the punchy talk, the road ahead is littered with obstacles. “Military autonomy will cost billions” and Germany’s economy is flatlining. The country is “a prime target for US tariffs and China’s dumping”.

Merz’s spending ability is severely constrained by a “debt brake” that limits federal borrowing to no more than 0.35% of GDP (there has been talk of scrapping this).

While the “risks of a trans-Atlantic fissure have clearly increased”, it will be hard to sever ties altogether, says Neil Shearing on Capital Economics. Despite the “head-spinning” turn of events, in practice there are “powerful forces” acting against Europe splitting from the US to become a “third superpower”.

“Political, cultural, social, economic and security ties” run “broad and deep”. Europe is an important part of the “economic diversity” of the US bloc and the US has come to rely on Europe as part of its “push to contain China”.

A deal to end the war in Ukraine might emerge more quickly. The pressure to increase defence spending will be “intense”. But the most likely outcome is that in four years’ time the US and Europe will “still be allies”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Emily has worked as a journalist for more than thirty years and was formerly Assistant Editor of MoneyWeek, which she helped launch in 2000. Prior to this, she was Deputy Features Editor of The Times and a Commissioning Editor for The Independent on Sunday and The Daily Telegraph. She has written for most of the national newspapers including The Times, the Daily and Sunday Telegraph, The Evening Standard and The Daily Mail, She interviewed celebrities weekly for The Sunday Telegraph and wrote a regular column for The Evening Standard. As Political Editor of MoneyWeek, Emily has covered subjects from Brexit to the Gaza war.

Aside from her writing, Emily trained as Nutritional Therapist following her son's diagnosis with Type 1 diabetes in 2011 and now works as a practitioner for Nature Doc, offering one-to-one consultations and running workshops in Oxfordshire.