2025 is a huge year for global geopolitics, filled with leadership changes, economic uncertainty, and looming social unrest. Germany is no exception, as the country must face all three of these issues head-on. The choices Germany has to make will leave a lasting impact for years to come, not just on the state, but also on the EU and further afield. While these issues are not exclusive to Germany, the jeopardy and risk of loss that it faces arguably outweighs many others.
Much of Germany’s attention in 2025 will be focused on fixing an export-driven economy teetering on the edge of collapse. Trump’s threats to increase tariffs on imports from Europe could not have hit Germany at a worse time. Long known for its manufacturing expertise, Germany relies heavily on foreign consumers to purchase its efficient and effective products. It is estimated that the German automobile industry exports nearly 70% of all cars it manufactures, with the USA as its largest buyer. The boom in China’s Electric Vehicle (EV) market is set to provide unprecedented competition to the future of Germany’s car manufacturers which have seemingly not adapted to the rise in EV demand as quickly. Such a strain on this traditional source of economic security for Germany explains the country’s somewhat stagnant economy, with only 0.4% growth in 2024 and a predicted growth of only 0.3% in 2025.
To make matters worse, Germany’s historic reliance on Russian gas puts them between a rock and a hard place. Since Russia’s invasion of Ukraine in 2022 and the destruction of Nord Stream 1 and 2, Germany’s energy costs have soared. Given the vast volumes of energy needed for manufacturing, this has only inflated the cost burden Germany’s already struggling industries have to take. Retrospective criticism has been placed on Angela Merkel’s shoulders. As Chancellor, she was responsible for phasing out the use of nuclear power plants in Germany in the wake of the Fukushima disaster in 2011, which accounted for around 25% of Germany’s energy at the time, narrowing the available energy sources that can now be called on. As a result, large factories have had to shut down, with increased operation costs leading to reduced profitability. BASF, Europe’s largest chemicals conglomerate, has shut down 11 factories in Germany and decided to relocate to China. This move has been detrimental to the German economy, with estimated losses of up to €1 billion, leading to greater local unemployment. Given this range of competing strains on the economy, public frustration with the current administration has increased noticeably.
Since the departure of Angela Merkel and the Russian invasion of Ukraine, Germany has faced many political challenges. Whilst there has been a Europe-wide rise of the populist far-right, Germany’s far-right, the Alternative for Germany (AfD) party, threatens to derail the Eurozone at large. As of November 6th, 2024, in a shockingly fast turn of events, the “traffic light” coalition (Ampelkoalition) of the SPD (Social Democrats), Die Grünen (the Greens), and the FDP (the Liberals) fell apart as Christian Lindner—FDP leader and ex-German Finance Minister—was fired by Chancellor Olaf Scholz over internal disagreements on Germany’s 2025 Budget. This came in the immediate aftermath of Trump’s election win in the USA, triggering uncertainty for the future of the European economy. Since then, Scholz has lost a vote of no confidence in his government following the collapse of his majority coalition and has called for a snap election on February 23rd, 2025. The voting forecasts paint a worrying picture with the far-right AfD party set to win 19.6% of the vote (at the time of writing). Currently, the conservative CDU/CSU (Christian Democrats), led by Friedrich Merz, is projected to win the largest proportion of the popular vote (31.6%). However, as they would lack an outright majority, Merz would need a coalition partner to gain a majority. Adding the projected AfD stake to that of the CDU/CSU would give him this, however, he has so far indicated a reluctance to work with them.
Public discontent with government services, the economy, and immigration are some of the largest reasons for the AfD’s popularity, with the party campaigning for more anti-establishment positions. They have vocally claimed that the existing systems and institutions endorsed by German politicians and the state are not functioning. This feeling seems to hit home more with the ex-East German states than the West, with a noticeable divide in life satisfaction between the two. As of 2019, a poll suggests a minority of “only 38% of East Germans see reunification as a success” and “57% of East Germans feel like second-class citizens”. This somewhat explains the AfD’s popularity in positioning itself as a break away from traditional government. Euroscepticism and anti-immigration policies lie at the heart of the AfD’s promises to its voters. This would be a huge reversal of the previous German sentiment as the EU’s strongest proponent, and a leader of pro-immigration policies, with a net increase of 6.43 million migrants between 2013 and 2023. As the election nears, their message becomes increasingly extreme. Alice Weidel, the AfD’s candidate for German Chancellor, has embraced terms such as ‘remigration’, a term associated with the mass deportation of migrants and ‘unintegrated’ German citizens. With this comes a promise that if they were to take office they would also close all borders, exit the Paris Agreement on climate, and leave the EU’s asylum agreement. Consequently, this deglobalised and aggressively isolationist approach is driving the CDU/CSU further right as they attempt to win right-of-centre votes back off of the AfD.
It seems that the German voters will not look favourably on the previous coalition’s time in office either. Economic stagnation, an energy crisis, new highs in violent crime, widespread discontent about migration and integration policies, and a subsequent rise in far-right popularity not seen since the Second World War–the current forecasts all suggest that Scholz is on his way out. On February 23rd, the German people will decide on what they want the future of their country, and Europe more widely, to look like for years to come.
Whilst the above paints a rather dim picture of the multitude of issues Germany faces, not all is doom and gloom. In the last century, no country in Europe (maybe even the world) has seen as many changes and reforms to their way of life as Germany. Having been split between Communism and Capitalism, the centre of two World Wars and the Cold War, Germany emerged in the 2000s as a European political powerhouse and economic manufacturing giant despite its setbacks. The challenges it faces today are in many ways not new, and the resilient spirit of a people who have had to adapt to so much from generation to generation cannot be underestimated.
Nevertheless, the time is now for Germany to address the challenges it faces. The jeopardy in both economic and political spheres that looms is no small matter. 2025 will be a defining year for the German people to decide who they want to be and what vision they have for the future of their country.