(de-news.net) – The governing coalition in Germany is now debating the pace and content of its reform agenda more intensely as a result of the Saxony-Anhalt election defeat. CDU leaders defend ongoing economic growth-oriented reforms, while SPD leaders and a number of state leaders are advocating for more social balance, as well as a renewed focus on public concerns. Meanwhile, business associations caution that Germany’s economic competitiveness may be weakened by political unpredictability and discriminatory policies.
The CDU/CSU parliamentary group in the Bundestag has rejected calls to reopen discussion of the Federal Government’s proposed reforms following the CDU’s decisive defeat in the Saxony-Anhalt state election. Thorsten Frei, the parliamentary group leader, argued that the election result should not be interpreted as a reason to slow the government’s reform drive. Instead, he maintained that the measures were intended to restore economic growth and strengthen Germany’s economic position, rather than function as political ends in themselves.
Chancellor Friedrich Merz and Vice Chancellor Lars Klingbeil, meanwhile, called for greater unity within the governing coalition as it confronted the political consequences of the election. Speaking at a meeting in Berlin of the SPD parliamentary group’s conservative Seeheimer Kreis, both leaders reaffirmed their commitment to implementing the government’s reform program. Klingbeil warned that the coalition’s opponents would ultimately benefit if far-right agitators succeeded in placing the government under political pressure. At the same time, however, voices within the SPD were calling for renewed consideration of individual policies, including the government’s pension plans, underscoring tensions over how the coalition should respond to the election.
Merz had previously described the AfD’s victory in Saxony-Anhalt as deeply unsettling and argued that the government could not simply return to business as usual. The scale of the result underscored the political challenge: The AfD came close to securing an absolute majority, while the CDU’s share of the vote was roughly halved.
SPD leader Bärbel Bas took a different approach, arguing that the election should have substantive consequences for the Federal Government’s strategy. While she emphasized that reforms were necessary to preserve the social security system and help revive economic activity, Bas also maintained that social policy could not be pursued at the expense of the population. In her assessment, secure employment, adequate wages and falling rather than rising prices needed to be addressed together, reflecting the broader challenge of reconciling economic reform with social security.
Bas subsequently called for significant adjustments to federal policy, pointing to unresolved concerns involving health care, pensions and long-term care. She argued that people who had spent much of their working lives contributing to the system needed confidence that they would remain financially secure in retirement. Against that backdrop, she criticized rhetoric suggesting that employees should work more hours, take fewer sick days and accept greater pressure. Such messages, she maintained, risked generating uncertainty and mistrust rather than strengthening public confidence. Her position stood in marked contrast to Merz’s repeated calls for Germans to work more and his criticism of what he regarded as excessive sick leave.
Bas and Schwesig urge responses to public unease
Manuela Schwesig, the SPD premier of Mecklenburg-Western Pomerania, went further in calling for substantial changes to the government’s reform program. In her assessment, restoring confidence in the democratic center would require not only a different political tone but also greater attention to the pressures confronting working households. She argued that the political response needed to take account of the strains facing people who combine employment with family responsibilities. Schwesig also expressed concern about what she regarded as the AfD’s contribution to the coarsening of public discourse.
Schwesig directly criticized Merz’s portrayal of German workers, arguing that it failed to reflect the circumstances of many households. People working full time may simultaneously be raising children and caring for relatives in need, she noted, while many such families have relatively modest incomes. For that reason, she argued, greater support for the working middle class should be central to the government’s response to the election.
She also called for a reassessment of the substance of the reform agenda. Although Schwesig acknowledged the need to stabilize the welfare state and prevent labor costs from increasing, she argued that those who work and contribute the most should not disproportionately carry the burden of reform. Economic growth, support for small and medium-sized enterprises and social justice therefore needed to be treated as interconnected priorities, she maintained, if the democratic center was to demonstrate a credible path forward.
One of Schwesig’s specific demands was the restoration of penalty-free retirement after 45 years of contributions. She argued that a limited hardship provision would not adequately resolve the issue and welcomed indications from Merz, Bas and Klingbeil that the pension policy could be discussed again. She also pressed the government to respond to record fuel prices, criticizing the expiration of the fuel discount and the rejection of proposals including a price cap, an excess-profits tax and a reduction in the carbon price. For Schwesig, the issue represented another area in which the government needed to offer concrete relief rather than simply reject proposed measures.
Rhein calls on CDU to rebuild trust as business leaders warn of economic risks
In Hesse, CDU Premier Boris Rhein argued meanwhile against continued use of the political metaphor of a “firewall” to describe the party’s stance toward the AfD. He contended that many AfD voters were motivated by insecurity and fears of social decline rather than ideological commitment, and that an excessively rapid reform agenda could intensify those concerns. Rhein therefore advocated concentrating on the most important measures first and suggested that the government might need to reduce the pace at which reforms were introduced.
Rhein described the Saxony-Anhalt result as a final warning and argued that the CDU needed to rebuild relationships with voters it had alienated. His position did not amount to support for cooperation with the AfD. He maintained that a coalition with the party remained unacceptable because of fundamental differences, including on Russia and Europe. Instead, Rhein called for greater willingness to engage with AfD supporters, listen to their concerns and address the erosion of trust that had contributed to their electoral support for the party.
The reform agenda itself, Rhein argued, also needed to be narrowed and prioritized. With major challenges simultaneously involving pensions, long-term care and statutory health insurance, he contended that the government was attempting to manage too many significant initiatives at once. A step-by-step strategy would therefore be preferable, with priority given to measures most likely to generate economic growth. Among those measures, he identified lower taxes, reduced bureaucracy and more affordable energy as central priorities.
Rhein nevertheless rejected the idea of immediately opening a leadership debate over Merz. Although he attributed some of the political backlash in Saxony-Anhalt to the chancellor, he argued that policy should take precedence over personnel. With the chancellor and Bundestag elected for four-year terms, the immediate challenge was to regain public support, strengthen the political center and demonstrate that the government could deliver on its core objectives. In his view, personnel questions were therefore less pressing than the need to address the political and policy issues exposed by the election.
Werding asks Berlin to stay on course with regard to pension reform
In turn, economist Martin Werding is urging the Federal Government not to draw premature conclusions from the state election in Saxony-Anhalt, arguing that the result should not derail the broader debate over pension reform. Instead, he said, the government and Bundestag should continue their examination of the reform proposals developed by the Commission on Old-Age Security. Targeted adjustments could be made where necessary, but the overall package should not be reopened in its entirety.
Werding emphasized that Germany’s demographic pressures are expected to become fully apparent over the next decade, making reform an increasingly important issue. Against that backdrop, he also warned that an anti-immigration policy pursued by the AfD could place additional pressure on the financial foundations of the country’s social insurance system. Current projections for future pension contributions and overall social-security contributions are based on the assumption that net immigration will remain at a persistently high level.
That assumption has become more significant as actual immigration numbers have declined substantially in recent years. Werding argued that Germany’s ability to attract workers must therefore remain an important consideration as it competes internationally for mobile labor. If the country fails to clearly signal that employment-based immigration is welcome, he warned, economic growth could suffer while the financial pressures confronting the social-security system could intensify.
Business organizations also warned that the AfD’s electoral success could have negative economic consequences. VDMA President Kawlath described the result as concerning and said it sent a clear signal to federal policymakers that Germany needed a stable course centered on international competitiveness. BDI Chief Executive Gönner likewise warned that the election should not lead to political paralysis in Berlin. DIHK President Adrian, meanwhile, called for effective implementation by the end of the year of measures intended to strengthen the economy’s competitiveness and long-term resilience.
The president of the German Retail Federation, von Preen, also warned that policies perceived as isolationist or exclusionary could damage Germany’s standing as a destination for business and skilled workers. He specifically expressed concern that prospective skilled workers from abroad could be discouraged from coming to Germany, potentially adding to the economic risks already associated with the political uncertainty surrounding the election result.
