From economic powerhouse to search for direction: what does the 2025 election mean for Germany's future?

This election marks a pivotal moment in the country’s history, reflecting broader societal shifts and complex economic and social challenges that have evolved over the past decade.

The Merkel Era and Its Legacy

During Angela Merkel’s tenure, Germany was often viewed as a bastion of stability and economic resilience. The nation successfully navigated the global financial crisis and the European sovereign debt crisis, emerging with a robust economy and a reputation for high-quality, innovative manufacturing. The "Made in Germany" brand symbolised excellence in machine building and the automotive industry, with German products in demand worldwide.

Under Merkel, Germany also demonstrated a commitment to humanitarian values, particularly in 2015-2016, when it welcomed over 1.1 million Syrian refugees amidst global turmoil. This move, while initially seen as a testament to Germany’s democratic ideals, laid the groundwork for future challenges in integration and social cohesion.

Immigration and Integration Challenges

However, recent years have seen Germany grappling with challenges. The war in Ukraine triggered a massive influx of refugees, with over a million arriving since the Russian invasion began in February 2022. In addition to Ukrainian refugees, 3 million more from other countries sought asylum between 2015 and 2024. A significant portion of these individuals were young men from Syria, Afghanistan, Turkey, Iraq, and Somalia. The total net migration of all foreign nationals (refugees and asylum seekers, labour migrants, family re-unification) to Germany between 2015 and 2023 reached 6 million, a figure exceeding the combined population of Berlin and Hamburg. Many refugees who arrived in 2015 have yet to be fully integrated into the labour market, with employment rates at 61 percent for Syrians and a mere 23 percent for Ukrainians. Terror attacks, rising crime rates among migrants, and an increasingly strained welfare system fueled a divisive debate about the economic and social costs of migration in Germany. Ipsos data shows that migration is the biggest worry among the German population. The far-right Alternative for Germany (AfD) and the radical left Bündnis Sarah Wagenknecht (BSW) capitalized on these tensions, challenging the country’s traditional political dynamics.

Germany's current top five worries: February 2025

Economic Pressures and Deindustrialisation Fears

The German economy, once a model of strength, now faces pressing challenges. The cost-of-living crisis, exacerbated by post-pandemic supply chain disruptions and the Russian invasion of Ukraine, saw inflation soar to over 10% in October 2022. Although inflation has been somewhat contained, essential goods like butter continued to surge in price until December 2024. Real wage growth only outpaced inflation in 2024, leaving many Germans grappling with financial uncertainty.

The Russian war in Ukraine has also pushed energy prices to unsustainable levels for Germany's energy-intensive industries. Ambitious energy transformation policies, such as phasing out coal-fired power generation, abandoning nuclear power, and insufficient investment in the energy grid, have exacerbated the situation. Complex bureaucracy and overregulation have made Germany less attractive for investment. Internationally, Germany's export-oriented industry, accustomed to success, faces two major uncertainties: its vulnerability to protectionism and trade tariffs in an increasingly volatile global market, and the loss of its innovative edge against competition from domestic products in markets like China. Towards the end of 2024, major German companies like VW, Continental, and BASF announced plans to reduce their workforce, raising fears of impending deindustrialisation. Economic competence has emerged as a crucial factor influencing German voters.

Current Economic Situation in Germany by income level - % ‘Very good’ or ‘Somewhat good’

Defence and International Relations

Germany's defence strategy has also come under scrutiny. Historically, the country benefited from a "peace dividend," with defence spending as low as 1.33% of GDP in 2021. The German armed forces are in no state to protect Germany let alone the eastern borders of its European / NATO allies. However, the Russian aggression in Ukraine and changing geopolitical dynamics, including the withdrawal of the US from transatlantic partnerships, have prompted a re-evaluation of the country’s Germany's defence policy.

Germany has emerged as the second biggest supporter of Ukraine, providing military aid and taking the unprecedented step of deploying German-built tanks on the Eastern Front for the first time since 1945. This shift, while substantial, has divided public opinion, particularly in eastern Germany, where support for Ukraine is less pronounced than in the west. Again, parties at the political fringe oppose further support for Ukraine and higher defence spending.

Support for deliveries of weapons to Ukraine: January 2025 by Voting Intention

The everyday struggle

Adding to the general discontent, data from Ipsos reveals that Germans are increasingly frustrated by everyday grievances in a country where efficiency and precision are considered cornerstones of its post-war identity. Rising rents and property prices, particularly in metropolitan areas like Berlin, Hamburg, Frankfurt, and Munich, are a major concern. For many aspiring Häuslebauer, the dream of owning a home – a symbol of middle-class success – has become increasingly distant.

Germans are also dissatisfied with the efficiency of their healthcare system. Despite being one of the most expensive in the world, waiting times for specialist consultations remain long, while contributions continue to rise. A chronic lack of investment in infrastructure is evident in persistent mobile phone coverage gaps, an unreliable railway system, and crumbling bridges. The country's once-praised education system is also slipping.

Political Fragmentation and the 2025 Elections

The coalition government formed by the Social Democrats, the Green Party and the Liberals (also called the “traffic light coalition”), the first after sixteen years of Merkel's rule, had promised much-needed reforms and investments. However, plagued by deep ideological divisions between state-led interventionist economic policies and liberal market doctrine, the government found itself in a perpetual stalemate. Lack of trust and public dissatisfaction with the government reached unprecedented levels and the coalition collapsed in November 2024.

Satisfaction with the chancellor and the government over time

The February 2025 federal elections were set against this backdrop of economic, social, and defense-related turmoil. The elections were expected to favour the conservative Christian Democrats (CDU/CSU), but they failed to capitalise on the coalition’s struggles. Electoral support for the CDU/CSU had hovered only at 30 percent for nearly two years and its candidate for chancellorship – Friedrich Merz – has been one of the least popular in German history.

Preferred Chancellor before the election

Whilst the conservatives won the national election in February 2025, the result of 28.5 percent was lower than during the European elections six month earlier (30%). It is the second worst election result in the history of the German conservative party. Parties of the outgoing coalition faced a similar fate – the SPD suffered their worst election result (16.4%), the Greens won 11.6% of the vote and the liberal FDP did not even cross the 5 percent threshold to make it into the Bundestag.

The real winners are Die Linke and the AfD. Die Linke positioned itself as a progressive force advocating liberal migration policies and social justice, attracting urban voters disillusioned with the Greens. Meanwhile, the AfD emerged as the second-largest party in the Bundestag, reflecting a significant shift toward far-right ideologies in German politics.

Democracy and the Path Forward

Despite the challenges, the elections demonstrated the vibrancy of German democracy, with one of the highest voter participation rates in recent history (82.5%). The electorate faced a diverse array of choices, from liberal and social democratic parties to the greens, conservatives, far-right, and two left-wing factions.

The path forward for Germany is fraught with complexity. The CDU/CSU is in discussions with the Social Democrats (SPD) to form a coalition government, but both parties are weakened by the election results. Trust in this (yet to be formed) coalition is already low.  Together, they hold a slim majority in the Bundestag, and enacting necessary reforms will require broader legislative support. Changing German basic law necessitates a two-thirds parliamentary majority, which means cooperation with Ddie Linke or the AfD—an option the CDU firmly rejects.

Trust in Grand Coalition is low

In an unusual twist, the yet-to-be-formed government is attempting to pass critical legislation with the outgoing Bundestag, where more favorable democratic majorities exist. This approach underscores the urgency of addressing Germany’s multifaceted challenges, from economic reforms and immigration policy to energy transition and defence strategy.

Germany stands at a crossroads, navigating the delicate balance between economic pressures, social cohesion, and political fragmentation. The decisions made in this critical period will shape the nation’s trajectory for years to come, demanding leadership that can bridge divides and foster a vision for a resilient and inclusive future.

Ipsos is proud to have called the elections right. We closely follow German political sentiment and frequently publish German public opinion polls. For more information visit our dedicated webpage: Meinungsumfragen | Ipsos

Dr. Robert Grimm is a director within Public Affairs at Ipsos in Germany