Turmoil for Germany’s New Coalition Government as First Vote Fails
FRANKFURT, Germany — Friedrich Merz faced a surprising setback in his new role as chancellor after failing to secure a majority vote in the first round of parliamentary elections. Though he eventually won on the second ballot, questions now linger over his government’s effectiveness in revitalizing Germany’s struggling economy.
The setback at the outset of his coalition with the Union bloc and Social Democrats raises doubts about their ability to overcome stagnation that has plagued Europe’s largest economy since the pandemic. Many had hoped Merz’s leadership would end the conflicts over budgets and spending that hindered previous administrations.
Merz’s coalition had previously garnered optimism following a successful election in February, but the initial vote in parliament has raised issues regarding the stability of his majority and the feasibility of proposed reforms aimed at boosting growth after two challenging years.
“The failed vote caught many off guard and has already weakened Merz,” noted Franziska Palmas, a senior economist. “His promises for a more efficient government now seem less credible. This could complicate his plans for significant increases in defense and infrastructure spending, tax cuts, and reducing bureaucratic red tape.”
Despite having 328 seats in the new parliament, Merz only received 310 votes in the first ballot, falling short of the 316 needed for a majority. This led to speculation that some fiscally conservative members of his coalition might be uncomfortable with his plans to lift Germany’s constitutional limit on deficit spending.
While Merz did secure the necessary votes on the second attempt, analysts believe the damage has already been done. Andrea Roemmele, a professor at Berlin’s Hertie School, remarked that he took office “with two black eyes and shaky knees.”
The hope that swift investments and reforms could be implemented has diminished, according to Carsten Brzeski from ING bank, who pointed out that the sense of urgency for a functional government is not fully recognized by all members.
Germany’s economy is already under pressure from various fronts, including high energy costs caused by the loss of Russian gas supplies due to the Ukraine conflict and increasing competition from China, which has shifted from being a lucrative market for German exports to a rival in key industries.
Holger Schmieding, chief economist at Berenberg bank, noted that while the first vote was a setback, much of the groundwork on spending limits had already been laid out by the previous government, potentially smoothing the path ahead for future initiatives.
As the government navigates this rocky start, the focus remains on whether it can successfully implement policies that will lead Germany out of economic stagnation and ensure long-term growth.
