When U.S. President-elect Donald Trump was first elected in November 2016, many European countries rallied around German Chancellor Angela Merkel as the new leader of the free world. This time around, they will have to look somewhere else: The three-party coalition in Berlin under Chancellor Olaf Scholz has just collapsed after the Free Democrats—a small pro-business party—rebelled on the economic direction of the country.
The timing seems terrible after Trump’s reelection just the day before, which threatens to throw Europe and Germany into an era of instability. In reality, however, the crisis in Berlin could prove to be good news. The coalition of Scholz’s Social Democrats, Greens, and Free Democrats was the most dysfunctional, dithering, and divided German government in decades. The members of the coalition actively worked against one another on European Union affairs, Ukraine aid, China policy, and economic reform. With Trump returning to the White House, Germany and Europe cannot afford near-total paralysis in Berlin.
When U.S. President-elect Donald Trump was first elected in November 2016, many European countries rallied around German Chancellor Angela Merkel as the new leader of the free world. This time around, they will have to look somewhere else: The three-party coalition in Berlin under Chancellor Olaf Scholz has just collapsed after the Free Democrats—a small pro-business party—rebelled on the economic direction of the country.
The timing seems terrible after Trump’s reelection just the day before, which threatens to throw Europe and Germany into an era of instability. In reality, however, the crisis in Berlin could prove to be good news. The coalition of Scholz’s Social Democrats, Greens, and Free Democrats was the most dysfunctional, dithering, and divided German government in decades. The members of the coalition actively worked against one another on European Union affairs, Ukraine aid, China policy, and economic reform. With Trump returning to the White House, Germany and Europe cannot afford near-total paralysis in Berlin.
After the 2021 national election in Germany, the three parties declared “a new beginning” to break the reform stagnation of the Merkel era. Then, after Russia launched its full-scale invasion of Ukraine in 2022, they promised a reckoning with Germany’s old business model, which had depended on Russia for cheap gas, China for growing exports and investment, and the United States for military protection.
Two years on, even the rosiest of optimists would struggle to see the glass of change as even half full. Rather than step up as a leader of Europe and the West, the coalition abdicated leadership in Europe, avoided pressing strategic decisions, and pursued narrow national interests first. On Ukraine, Germany can scrape together a passing record at best. Yes, it has been one of the biggest donors, leads in commitments for heavy weapons deliveries, ranks second in total aid to Ukraine after the United States (although only 15th by aid as a percentage of GDP), and has accepted the most voluntary Ukrainian refugees of any country.
However, Germany has no strategic focus or sense of urgency. Going against his coalition partners and contrary to his own claims of being in lockstep with allies, Scholz has continued to prohibit the delivery of German-made Taurus missiles, even after Britain, France, and the United States delivered their own long-range strike missiles. And support for Ukraine has been cut and deprioritized in the 2025 federal budget, with the German government disingenuously declaring that loans backed by the interest earned by frozen Russian assets would offset the cuts. This clever use of Russian assets was supposed to expand Western aid, not replace it.
For its own defense spending, Germany finally reached NATO’s minimum of 2 percent of GDP this year, but the special off-budget fund created to boost spending to this level will run out in 2027. How Berlin intends to finance defense in 2028 and beyond is entirely unclear; the coalition simply kicked that can down the road. Social Democratic Defense Minister Boris Pistorius—the most popular politician in Germany, which is why the unpopular Scholz has largely sidelined him—said that the 2025 budget does not provide the necessary funds to cover increased personnel costs, much less to invest in new capabilities. Germany’s discussion about restoring conscription to its depleted forces led nowhere beyond a voluntary option. Far from becoming a leading security player and the “best-equipped armed force” in Europe, as Scholz promised, Germany looks to be continuing business as usual.
In Europe, the Scholz government has been seen as the most unilateral, inward-looking, and uncooperative German leadership in a long time. Not only did Berlin unilaterally reintroduce border controls in a panicked reaction to right-wing populists surging in opinion polls following a series of violent attacks involving migrants, but the German government’s representatives at the European Union were also increasingly abstaining from votes because the coalition’s three parties had no unified position.
Broader European interests seemed completely absent from German calculations; for example, when Germany joined Hungary, Malta, Slovakia, and Slovenia to vote against imposing tariffs on Chinese electric vehicles. And Free Democrat Finance Minister Christian Lindner, whom Scholz fired on Nov. 6, was the first to say “no” to former European Central Bank President Mario Draghi’s proposal to increase European competitiveness with large-scale investments financed through joint debt.
With early elections expected by the end of March, it will be a new opportunity for Germany to assert leadership on these strategic issues. If a vote were held today, the most likely result would be a grand coalition of the right-of-center Christian Democrats and the left-of-center Social Democrats—with the former coming out on top and thus providing the chancellor. They collectively poll at about 48 percent of the vote. When Merkel, a Christian Democrat, was the chancellor, she ruled under this constellation for 12 of her 16 years in power, and although this time was marred by perceptions of inertia, a change of chancellorship could bring new strength to Germany’s foreign policy.
Friedrich Merz, the Christian Democrats’ party chairman and likely chancellor of a grand coalition, would finally achieve his life goal after having been pushed out from politics by Merkel two decades ago. On security, Merz has already signaled that he is more forward-leaning on Ukraine than Scholz. He publicly challenged Scholz to deliver Russian President Vladimir Putin an ultimatum: Stop attacking Ukrainian civilian infrastructure within 24 hours, or Germany will deliver Taurus missiles. Although Merz would need to follow up his rhetoric with action if and when he actually moves into government, a grand coalition could also provide new fiscal flexibility to underwrite defense spending and aid to Ukraine, since both parties could agree to loosen Germany’s fiscal restrictions, which Lindner and the Free Democrats opposed.
This would be the kind of leadership that Germany’s European partners have waited for since 2022, when Scholz proclaimed a Zeitenwende—or new era—in security and defense without ever following up. And that kind of leadership will be indispensable with war raging in Europe and Trump in the White House for a second term.
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