It's a crisis of their own making, one that could lead to their collapse after just seven months in power.
The latest challenge to the conservative leader's credibility comes from within the Christian Democratic Union (CDU), as a group of about 18 younger CDU lawmakers reacted against a pension bill, which is expected to pass the final vote in the Bundestag on Friday. Merz's parliamentary group (CDU/CSU) and the SPD hold 328 seats out of 630 in the lower house, securing a slim majority of just 12 seats.
If the coalition fails to pass the bill, it will be another extremely humiliating failure for Merz, following his failed election in May and the failure to appoint a judge to the Constitutional Court in July. The failure to pass the bill would highlight the Chancellor's lack of authority over his own party and could cause irreparable damage to the government's ability to pass legislation. The consistent leader of the SPD, Baerbel Bas, hinted this week that if the pension bill doesn't pass, it could signal the collapse of the coalition. Such an outcome could lead to new national elections, at a time when the far-right Alternative for Germany (AfD) is polling first in some surveys, boosted by concern over economic stagnation.
Merz has little room for error
The governing coalition has a 12-seat majority in the lower house, while there's extremely limited space for errors.
Comparison of Parliamentary Parties (December 2025): SPD, CDU/CSU, Greens, AfD, Left
Amidst intense differences in their positions on key issues, the Chancellor and the Social Democrats are struggling to convince voters that they can deliver on their promises to revive growth, strengthen internal security and the armed forces, and rebuild damaged roads and bridges.
Many of the initiatives undertaken since May, including special funds for the military and infrastructure funded by hundreds of billions of euros in debt, need time to bear fruit.
Industry has reacted positively to some of the government's early initiatives, yet it has accused Merz and his ministers of a lack of urgency in restoring Germany's global competitiveness. The President of the influential business organization BDI, Peter Leibinger, warned this week that industries from automotive to steel and chemicals are at a "dramatic low point" as the year draws to a close.
"The economy is in freefall, but the government is not responding decisively," Leibinger said in a written statement.
"Every month without effective structural reforms costs more jobs and prosperity, and massively limits the state's future room for maneuver."
The dangerous state of the German economy
In a closed parliamentary group meeting on Tuesday, Merz asked all conservative lawmakers to support the controversial bill, according to two participants. He also referred to current geopolitical turmoil and warned that a negative vote would have dramatic consequences, said the participants, who requested anonymity due to the private nature of the meeting.
The premature collapse of the coalition would coincide with a critical moment for Germany's economy, which contracted in 2023 and 2024 and has grown only marginally this year.
The German economy hasn't grown since Merz took office
Following the February elections and the subsequent easing of strict debt rules, the initial enthusiasm that Germanywould restore growth in Europe has faded. Just last month, Merz's advisors lowered 2026 growth forecasts to below 1%.
The IMF has warned that Germany remains at risk of failing to achieve significant growth and faces long-term difficulties in achieving prosperity unless it proceeds with "bold" reforms.
The aging pension system, which struggles to cope with the growing number of retirees, is critical for many voters but has created tensions with younger people who feel burdened with the responsibility to finance benefits they may never enjoy. The bill guarantees pension payments until 2031 and, in controversial terms, provides assurances for retirees' incomes after that date.
AfD leads in some national polls
Meanwhile, the AfD, the far-right, anti-immigrant party, has successfully exploited concerns about irregular migration, raising its popularity to as much as 27% in one poll, 2.5 points ahead of the CDU/CSU.
After it became clear, following a secret ballot in the parliamentary group on Tuesday, that some of the younger conservatives refused to back down from their opposition, Merz and his parliamentary group managers are taking a great risk by proceeding with the vote on the pension bill, given the coalition's small majority.
The bill's passage may be facilitated by a move from the Left party, which announced on Wednesday that its lawmakers would abstain from the vote. To pass a law in the Bundestag, it only needs more votes in favor than against. An abstention by all 64 Left lawmakers would reduce the number of votes needed for a majority to 284 — a threshold the government could comfortably cross. However, passing the bill solely with the help of the anti-capitalist party would be a hollow victory and would not strengthen Merz's position.
The Chancellor is under widespread pressure within his party over what some see as excessive concessions to the Social Democrats. For its part, the center-left has made little effort to compromise on the pension issue, which was part of the joint governance plan negotiated by the coalition allies before they took office.
The AfD prepares to govern in Germany
With social dissatisfaction rising and traditional political forces unable to address citizens' concerns, the AfD is succeeding in expressing the demand for change, stability, and national sovereignty. The coming period is expected to be crucial, as data suggests that Germany may be closer than ever to a political shift that was previously considered unthinkable.
The case of Leif-Erik Holm
Before Leif-Erik Holm became one of the leading figures in the German patriotic sphere, he was a morning radio DJ in his homeland in East Germany. Ahead of the regional elections in Germany in 2026, Holm is now expected to become the AfD's lead candidate in the state of Mecklenburg-Western Pomerania, a predominantly rural region bordering Poland and the Baltic Sea.
With polls showing the AfD in first place with 38% in the state, it is one of the places where the party—which is now the largest opposition parliamentary force in the German federal parliament—is within striking distance of gaining significant governing power for the first time since its founding over a decade ago.
Holm embodies the type of candidate that at least some AfD leaders increasingly want to promote to the top. With an astute style, he avoids the incendiary rhetoric that other party politicians adopt and says he seeks dialogue with his political opponents. Asked what his party would do if it took power in the state next year, Holm listed some seemingly innocent proposals: more investment in education, including STEM specialties, and ensuring that immigrant children learn German before starting school. "I'm actually a good guy," Holm said.
Behind the image of the man next door, however, there is a clear political calculation. Party co-leader Alice Weidel is attempting a kind of repositioning, believing that the AfD will not be able to make the leap to real power unless it distances itself from candidates who openly express extreme views. This means moving away from controversial leaders like Björn Höcke—who was found guilty by a court of using a forbidden slogan used by Adolf Hitler's stormtroopers—and Maximilian Krah, who last year said he would "never say that anyone who wore an SS uniform was automatically a criminal."
Instead, the preferred candidate, at least for Weidel and her supporters, is someone like Holm, who can present a more sanitized face of the party. But the transformation proves to be superficial, and even Weidel, despite her national leadership role, cannot prevent the "mask" from slipping.
New appearance, same policy
Since its creation in 2013 as a Euroskeptic party, the AfD has become more extreme, mobilizing its radicalized base mainly around the issue of migration. Earlier this year, Germany's federal domestic intelligence agency—which is authorized to monitor groups deemed unconstitutional—designated the AfD as an extremist organization.
Weidel is now trying to limit... public extremism. The effort aims to make the AfD more acceptable to mainstream conservatives—and to make it difficult for the centrist Chancellor Friedrich Merz's alliance to refuse to govern with the party, maintaining the post-war "firewall" around the far-right.
Weidel's push for a more polished public image is not necessarily supported by large sections of the party base—especially in AfD strongholds in former East Germany—who point out that the party's rise coincided with its radicalization. The argument is not unfounded. Despite its increasingly extreme rhetoric, the party came second in the early national elections at the start of the year—the best national performance for a far-right party since World War II. In polls it now leads Merz's conservatives.
Nevertheless, Weidel is moving forward with the effort to beautify the AfD's image. As part of this effort, she has tried to somewhat distance her party from its proximity to the Kremlin—seeking closer ties with Republicans in the US. From now on, the party will "fight on the side of the white knight and not the black knight," as a person familiar with her thinking said.
In another attempt at redefinition, earlier this year, an extremist youth wing associated with the AfD self-dissolved to prevent a potential ban that could harm the party. Last weekend, a new youth wing was created, over which the party leadership will have direct control.
Other patriotic parties in Europe have made their own redefinition efforts. In France, Marine Le Pen has tried to "normalize" her party—an effort described as "de-demonization"—by abandoning the open antisemitism of its founders. As part of this shift, Le Pen was quick to distance her party from the AfD in the European Parliament. In Italy, Prime Minister Giorgia Meloni has moderated her former anti-EU and pro-Russian positions.
For the AfD, however, the attempted transformation is less a matter of substance—and more a matter of image. Behind Weidel's effort to improve the party's reputation, many of its most extreme voices still hold influence.
Ulrich Siegmund in the state of Saxony-Anhalt
Perhaps no AfD leader embodies this tension more than Ulrich Siegmund, the party's lead candidate in the state of Saxony-Anhalt, where the AfD leads in polls with 40% ahead of regional elections next September. It is here, in this small state of just over 2 million inhabitants, where AfD leaders are placing their highest hopes for entering state government in 2026—possibly even with an absolute majority.
Like Holm, Siegmund is trying to cultivate an image of a simple, everyday man. Even members of rival parties in the local parliament describe him as friendly and approachable. With over half a million followers on TikTok, he reaches more people than any other state-level politician in Germany.
At the same time, Siegmund is clearly linked to the extreme side of the party. He was one of the participants in a secret meeting of far-right extremists, where a "master plan" for the deportation of immigrants and "unassimilated citizens" was allegedly discussed. When the meeting was revealed last year, it sparked protracted anti-far-right protests across Germany and temporarily dropped the AfD's poll numbers.
Speaking to Politico, Siegmund downplayed the secret meeting as a "coffee chat," arguing that the real scandal is how the media exaggerated the episode. He described himself not as a dangerous extremist—but as a simple person who cares about his country. "I am a normal citizen, taxpayer, and resident of this country who simply wants a better homeland, especially for his children, for his family, for all our children," Siegmund said. "Because I simply cannot stand idly by and watch our country develop so negatively in such a short time."
But when pressed, Siegmund could not hide his extremism. He defended the use of the slogan "Everything for Germany!"—the banned Nazi phrase that landed his colleague Höcke in legal trouble. "I think it goes without saying that you should give everything for your own country," Siegmund said. "And I think that should also be the yardstick for every politician—to do everything they can for their country, because that's why they were elected and that's why they are paid."
Siegmund also objected to the view that the Nazis committed the greatest crime against humanity in History, and thus Germans have a special responsibility to avoid such terms. "I find this interpretation grossly exaggerated and completely detached from reality," he said. "For me, it is important to look forward and not back. And of course, we must always learn from History, but not only from individual aspects of it, but from the whole of History."
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