Germany heads to the polls on Sunday with far-right party expected to make gains
AfD taps into voter discontent about migration, economy
Germany holds its snap national election on Sunday following the collapse of Olaf Scholz's three-way coalition, and the coalition that emerges will face huge challenges, from reviving a flagging economy to forging a foreign policy amid the unpredictability of a new U.S. government.
The performance of the AfD (Alternative for Germany) will be most closely watched, as the other major parties have recognized a consensus not to join in a national government with the far-right AfD, which has been under surveillance by the German domestic intelligence service after previous party members had been linked to neo-Nazi groups.
Should polls accurately reflect the results, talks in forming the next coalition government could take weeks at a most difficult time, with Europe bracing from statements from U.S. President Donald Trump and his top officials, which have suggested the U.S. government is disengaging from the region and mending ties with Russia.
Created to protest euro zone bailouts over a dozen years ago, the AfD morphed into an anti-migration party after former chancellor Angela Merkel's decision to take in a large wave of refugees in 2015.
Berlin-based journalist Richard Walker told CBC News this week that the party has managed to outpace parties with similar philosophies in the recent past that were never able to gain more than a few percentage points of support.
"It's also brought in people who feel that the centre-right party, the [Christian Democratic Union], the party of Angela Merkel, has moved too far to the centre," he said.
AfD looks to turn votes into seats
Fronted by Alice Weidel — whose wife is from Sri Lanka — the AfD was quick to capitalize on a series of attacks in Germany by people with a migrant background.
At a recent rally in Neu-Isenburg, just outside Frankfurt, concerns about migration dominated.
"I don't want to have to be squeezed financially to support people who come here and hate me," said Wolfgang Hobus, a 56-year-old chemical worker, voting for the AfD for the first time.
The AfD is polling around 21 per cent, and ahead of Scholz and his centre-left Social Democratic Party (SPD), which led the most recent governing coalition with the Greens and the smaller liberal Free Democratic Party (FDP). In the 2021 federal election, the AfD garnered 12.6 per cent of the vote.
Whether the AfD wins a proportionate number of parliamentary seats, and whether those seats will be be more spread out than its traditional southeast concentration, remains to be seen.
"The interesting question will be whether the AfD is capable of doing what Italy's Giorgia Meloni did or France's Marine Le Pen is doing," said Alexander Clarkson, a lecturer for German studies at King's College London, "which is to say gradually pivoting on these issues without abandoning too many domestic policy issues."
The AfD has called for borders to be closed and asylum seekers to no longer have the right to family reunification.
Leading in the polls, the conservative CDU, which partners with Bavarian sister party the Christian Social Union, has shifted position on immigration from the days of Merkel. The alliance calls for pushing back asylum seekers at the borders, and for limits on family reunifications and naturalization for refugees.
The SPD itself has toughened its position by enforcing stricter border controls and accelerating deportations, although it also wants to bring in more foreign skilled workers.
Contracting economy
Europe's largest economy contracted for a second consecutive year in 2024, and the forecasts for this year do not offer hope for a quick turnaround.
Germany's constitutional debt brake — part of a Merkel-led response to the 2009 financial crisis — has prevented successive governments from making vital investments, such as in public infrastructure, needed to overhaul Germany's ailing economic model, economists say.
The brake limits the federal government's deficit to a mere 0.35 per cent of output. By comparison, last year the U.S. budget deficit was more than six per cent of output.
The ruling coalition parties, the Social Democrats (SPD) and the Greens, have pledged to continue that cap.
CDU leader Friedrich Merz's official position is that the debt brake must remain in the constitution and that there are no plans for reform. But senior party leaders told Reuters that Merz had privately accepted that change is inevitable due to Germany's huge investment needs in the economy and defence, with American engagement in European security no longer a given under Trump.
U.S. tariffs, if implemented, could also hurt Germany's auto sector.
"This is the time when Germany needs to invest and everybody else is doing it except Germany," Nikolaus Wolf, director of the Institute of Economic History at Humboldt University of Berlin, told Reuters. "It's really kind of suicidal."
There are ongoing questions with respect to housing policy.
A growing number of people are spending 40 per cent of their income on housing, the threshold for a household to be considered overburdened by rent payments, according to the Organisation for Economic Co-operation and Development (OECD).
Germany needs between 600,000 and 800,000 more homes to deal with demand, according to Berlin-based German Institute for Economic Research (DiW). Just 200,000 new homes were built during the last year, compared to 293,000 in 2021.
From 2010 to 2022, asking rents surged by 50 per cent nationally and by up to 70 per cent in large cities, according to a DiW report, while existing rents grew by 20 per cent. Germany is a nation of tenants with more than 50 per cent renting their homes, compared to an EU average of around 30 per cent in 2023.
'Will the Americans still be there?'
Germany has given more military aid to Ukraine than any other European nation. All of its mainstream parties favour helping Ukraine fend off Russia's invasion, though they sometimes differ on the details.
The exception is the AfD, who want an end to weapons deliveries to Kyiv and a resumption of good relations with Moscow.
But the country, like others in the G7 and NATO, is grappling with the disorientation stemming from the new U.S. administration.
"I hope that it [the U.S.] remains a democracy and does not slide into an authoritarian populist system," Merz said at a recent campaign event in Darmstadt.
Merz even cast doubt on Washington's presence for Germany's 70th NATO membership anniversary in May.
"Will the Americans still be there? Eight weeks ago I would not have dared to ask this question, but today we have to give an answer to it."
With files from CBC News