Chancellor Merz’s first year: A report card

Andreas Busch assesses German Chancellor Friedrich Merz’s first year in office. He scores his performance in different areas and highlights his key successes and challenges.

A year ago, when Friedrich Merz was elected Chancellor I wrote on this site that his background in business and transatlantic networks would draw him especially to foreign policy. With both the Chancellery and the Foreign Office in CDU hands for the first time in almost sixty years, the ingredients for a more coherent German foreign policy seemed to be in place. One year on, the picture is more complicated than that early optimism suggested.

Merz did indeed hit the ground running on the international stage. Even before taking office, he had engineered Germany’s most consequential fiscal policy shift in a generation: a constitutional reform of the debt brake passed with the outgoing Bundestag, unlocking a €500 billion infrastructure fund and exempting defence spending above one per cent of GDP from borrowing limits. The geopolitical rationale was explicit — the Trump administration’s unpredictability, the continuing war in Ukraine, and the infamous Oval Office encounter between Trump and Zelenskyy. Merz invoked Mario Draghi’s ‘whatever it takes’ to justify a sharp U-turn for a party that had made fiscal discipline a core identity marker.

Foreign Minister Johann Wadephul, a CDU colleague and former defence spokesman, proved a competent partner. The government navigated the Gaza crisis with more nuance than its predecessor, temporarily restricting arms exports that could be used in Gaza in August 2025 before lifting the restrictions after a ceasefire in November. On migration — the issue that dominated the election campaign — Interior Minister Alexander Dobrindt (CSU) acted from day one intensifying border controls and ordering the rejection of asylum seekers at Germany’s internal EU borders. He even pressed on when a Berlin administrative court ruled the rejection of three Somali asylum seekers at the Polish border unlawful.

Yet for all the foreign policy ambition, domestic politics refused to stay in the background.

The CDU/CSU–SPD coalition — the fifth grand coalition in the Federal Republic’s history but by far the smallest, with just 52 per cent of Bundestag seats — has been beset by conflict from the start. With a working majority of only twelve seats, every backbench rebellion becomes an existential drama.

The pattern was set early. In July, the coalition’s agreed candidate for the Federal Constitutional Court, Frauke Brosius-Gersdorf, had to withdraw after CDU backbenchers revolted over her positions on abortion, demonstrating that the party leadership could not control its own parliamentary group on sensitive issues.

In the autumn, Merz promised a ‘real change’ in social policy. Critics soon labelled it the ‘autumn of commissions’ — expert panels substituting for decisions. The pattern is familiar in German politics but sits poorly with a Chancellor who promised a departure from the Merkel era’s incremental caution.

The most dangerous episode came in December, when eighteen younger CDU/CSU members — the so-called ‘pension rebels’ — threatened to block a pension stabilisation package. With the coalition’s majority razor-thin, even a small revolt could bring down legislation. In the end, the package passed with just two votes to spare, leaving ‘deep scars in the coalition and within the Union.’

The SPD, meanwhile, has struggled with its role as junior partner. Party chair Bärbel Bas called Merz’s suggestion that Germany could no longer afford its welfare state in its current form ‘bullshit’ — hardly the language of a harmonious coalition. When Merz made an ill-judged remark about ‘the problem’ still visible ‘in the cityscape’ in relation to migration, SPD deputy faction leader Wiebke Esdar joined the resulting street protests.

The coalition’s most serious public rupture came in April 2026, when Economics Minister Katherina Reiche (CDU) openly attacked Finance Minister Lars Klingbeil (SPD) over his proposals for a windfall profits tax and energy price relief. Crisis talks that were to lead to a package of ‘comprehensive reforms’ instead only produced an emergency fuel tax cut of 17 cents per litre for two months — an echo of the Scholz government’s ‘Tankrabatt’ in 2022, a questionable energy policy, and a disappointment when compared to announcements beforehand.

The public has noticed. The ZDF Politbarometer in mid-April showed government satisfaction at a record low of 27%. Merz’s own approval had fallen to 30%, and only 18% rated coalition cooperation as good. Most strikingly, polling now puts the AfD ahead of the CDU/CSU — the governing coalition would no longer have a parliamentary majority if an election were held today.

Asked whether the coalition would last until the next scheduled election in 2029, Merz offered a notably un-reassuring answer: ‘Nobody can guarantee anything.’, Recently, however, the Merz cabinet managed to agree both on the fundamentals of the 2027 budget and a reform of the health system that is to help solve the latter’s deficit problem by producing savings of approximately €15 billion. If  this gets passed in the Bundestag, the coalition may in the future look back on this as a turning point.

So how would one grade Chancellor Merz’s first year? In the spirit of the German school system (where 1 is the best mark and 6 is the worst):

Foreign and security policy: 2 (good). The debt brake reform was bold and consequential. Merz has established himself as a credible interlocutor in European capitals and handled the Gaza situation with more agility than Scholz. The alignment of Chancellery and Foreign Office has delivered the coherence I predicted a year ago.

Domestic reform: 4 (adequate). The ‘autumn of commissions’ label stings because it is fair. The welfare-to-work rebrand (from Bürgergeld to Grundsicherung) is largely cosmetic. The pension deal nearly collapsed. The new military service model is an awkward compromise. The ambition is there; the delivery is not.

Coalition management: 4 (barely adequate). A majority of twelve seats would test any leader, but the repeated near-misses — the investiture fiasco, the pension rebellion, the Reiche–Klingbeil blow-up — suggest a Chancellor who has not yet found a reliable method for managing his own side, let alone his coalition partner.

Communication: 5 (poor). The ‘cityscape’ gaffe, the ‘bullshit’ exchange, the nobody can guarantee anything’ — Merz repeatedly creates unnecessary turbulence through imprecise or provocative language. For a Chancellor who hired a respected foreign policy journalist as government spokesman, the domestic messaging has been surprisingly clumsy.

Overall: 3 (satisfactory, with reservations). Merz has shown that he can act decisively when the stakes are high enough — the debt brake reform proved that. But his first year has also revealed a government that lurches from crisis to crisis, held together more by the absence of alternatives than by shared purpose.

The SPD is visibly unhappy but trapped: the FDP’s experience of walking out of the Scholz coalition and being punished by voters serves as a cautionary tale. Whether that deterrent holds through three more years of austerity arguments and migration rows is the central question of German politics heading into 2027.

By Andreas Busch, Professor of Political Science, University of Göttingen.