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Friedrich Merz attends the closed meeting of the CSU parliamentary group in the Bundestag at Andechs Monastery, Germany.
Germany’s Merz steps into controversy
Friedrich Merz has reminded Germany and the world that his center-right establishment party, the Christian Democratic Union, is now in a tight spot. The party leader suggested in an interview televised on Sunday that the CDU would be open to partnering with the hard-right Alternative für Deutschland party, at least at the local level.
"It's natural that we have to look for ways to ensure we can continue to work together" in places where AfD members win local elections, Merz said.
In the process, he implicitly acknowledged the reality that the AfD is polling at about 20% nationally and at about 30% in Germany’s East. But he was also breaking a taboo against mainstream acceptance of a party that, according to Eurasia Group, our parent company, has embraced an “openly xenophobic, anti-democratic, pro-Kremlin agenda.”
That’s why Merz quickly faced a backlash from both inside and outside the CDU, and on Monday morning he used Twitter to backpedal. “Our decision stands: There will not be any cooperation with the AfD, also not at the communal level,” he tweeted.
But the damage was done. Merz hopes to become Germany’s chancellor in 2025, and his biggest challenge in defeating the governing left-wing coalition will be to hold together a party in which western state members treat the AfD as untouchable while those in eastern states treat it as a fact of life. With contradictory statements within a matter of hours, he’s not off to a strong start.
AfD holds "Future for Germany" rally in Erfurt.
Why is Germany’s far right surging?
For extremely obvious reasons, it’s always a little unsettling when the far-right is having a good moment in German politics.
That’s exactly what’s happening now as the avowedly anti-immigrant and Euroskeptic Alternative for Deutschland Party, known as AfD, is now neck-and-neck with the Social Democrats, the party of Chancellor Olaf Scholz. The AfD, which is polling at 19% (to the SPD’s 20%), is closing in on becoming the country’s second most popular political faction. The Christian Democratic Union Party still holds the top spot at 27%.
What explains AfD’s recent upward trajectory, and what does it tell us about the state of German politics 18 months after former Chancellor Angela Merkel left the stage, ending 16 years at the helm?
AfD’s raison d'être. Founded in 2013, the group’s main shtick at the time was agitating against the European Union’s planned bailout of indebted countries after the eurozone crisis. The founders wanted to ditch the single market and bring back the German Deutschmark. (Spoiler: It didn’t happen.)
But when millions of refugees starting streaming into Germany in 2015 in the aftermath of the Syrian civil war, the AfD morphed into an anti-immigrant – and anti-Islam – party and has since called for the German constitution to gut the right to seek asylum.
Evoking outrage has been par for the course for AfD party stalwarts, and in some instances, it’s perhaps the entire point. Consider that the AfD leader of the central state of Thuringia has called for Holocaust memorials to be taken down, while former party leader Frauke Petry once said that refugees should be prevented from crossing into Germany … by using armed force.
It’s in former East Germany – where grievances about economic inequality and second-class citizenship have festered since the end of the Cold War – that AfD’s populist, ethnocentric messaging has gained the most traction.
Still, when Germans last went to the polls in Sept. 2021, AfD was polling at around 10% on average, and the far-right group is now reaping nearly double that at 19%, having seen a four-point bump over the past 12 weeks alone.
“This is not a blip, and not some sort of short-term thing,” says Jan Techau, Germany director at Eurasia Group and former speechwriter to German Defense Minister Boris Pistorius. “We've seen buildup over some time, and now it seems like AfD is solidifying.”
So what explains this seismic shift?
Economic misery and the blame game. Anti-establishment parties almost always get a boost when the economy is hurting. Stubbornly high inflation over the past year – in large part due to the war in Ukraine – has provided an opening for the AfD’s populist message to resonate not only with the extremist right but also with disillusioned conservatives and those opposed to the status quo.
Indeed, although inflation has begun to ease, food prices are still up 15% year-on-year, an enormous strain for working-class Germans.
What’s more, that economic instability has coincided with a rise in asylum-seekers trying to reach the European Union this year by boat – from South Asia, the Middle East, and Africa – has presented the perfect boogeyman for populists and nativists across the bloc, including in Germany.
Consider that in the first four months of this year, initial asylum applications in Germany increased by 78% compared to the same period in 2022. This is in addition to the more than 1 million Ukrainians who’ve crossed into Germany since the war began, though these migrants don’t engender the same national scorn.
While public support for arming Ukraine is at 57%, AfD’s recent rise in popularity suggests that its argument that sanctions against Russia hurt Germany’s economic interests is resonating with at least some voters.
Many AfD backers are “disenfranchised conservatives who see no other alternative because they feel the mainstream conservatives have become too liberal” and aren’t responsive to their bread-and-butter needs, Techau says.
The traffic light turns green. The German coalition government that came into office in 2021 is a varied one. The three-party coalition, the first in Germany’s modern history, includes Scholz’s SPD, the progressive, climate-conscious Greens, and the business-friendly fiscal hawks of the Free Democratic Party. The coalition is known as the “traffic light” owing to the colors of its three members.
With the Greens heading the economy portfolio, climate reform has been at the forefront of the government's domestic agenda, even more so since Russia invaded Ukraine and the EU made a collective pledge to kick its Russian natural gas habit.
Accordingly, the government has sought to slow the use of oil and gas heating systems by 2024, mandating that new heating systems are powered by at least 65% of renewable sources. The government's push to install heat pumps in homes and offices – a very expensive undertaking – has resulted in a massive pushback that the AfD has naturally used to its advantage. (AfD parliamentary leader Alice Weidel has called the government plan a “heating massacre.”)
Techau says that failure to sell this policy to voters has perhaps been the government’s biggest downfall. “When they started to legislate, they were quite ambitious and weren't able to explain it in a way that convinced people,” he says, adding that “people started to react quite negatively to this.”
Extremism abhors a power vacuum. The departure of Merkel after almost two decades at the top left a pair of sensible brogues that no successor has been able to fill. While her CDU/CSU remains the most popular, its support has certainly been slipping since 2020. As a result, some conservatives susceptible to economic populism have been lost to the AfD in recent months.
Tachau says the fact that current CDU leader Friedrich Merz is very unpopular has been a boon for AfD. “He’s not seen as a possible future chancellor, and that means that a good number of voters will go elsewhere,” he says.
This dynamic is exacerbated by the fact that Scholz’s SPD never had that much of an edge to begin with – winning just 10 more seats than the CDU in 2021. Perceptions of Scholz as unable to control infighting with his coalition over how to roll out domestic policies have only added fuel to the fire.
“The ideological leanings and the clumsy craftsmanship of Scholz's coalition, especially on migration and energy, have massively aggravated the situation,” Techau says, adding that while “they are not to be blamed alone, as much of the anger is structural and has built up over a long time, the coalition's performance over the last 18 months made the whole situation boil over.”
Could AfD really rule? All of Germany’s major political parties have committed to putting up a Brandmauer – a firewall – between them and the AfD, meaning that they have agreed not to sit with the formerly fringe group in any governing coalition. But if the far-right party gets more and more popular, could that change by the next election?
For now, Techau doesn’t think so. “In Germany, the ghosts of the past are always quite present,” he says.
However, even though the AfD could be kept out of a government by other major parties forming a broad (and unstable) coalition, that too would only feed into the AfD’s narrative of ostracization and otherness.
Indeed, such a move “would only turn into a shallow mechanism to keep them out,” Techau says. His takeaway? “No matter which way you do it, you're doing it wrong.”
Police secures the area in Berlin after 25 suspected members and supporters of a far-right group were detained during raids across Germany.
What We’re Watching: German coup plotters, Peru’s self-coup, Xi’s Saudi visit, TSMC’s big investment
A thwarted German Jan. 6?
Is there a single German word for "narrowly averted right-wing coup attempt"? We aren't sure, but on Wednesday German authorities arrested 25 people accused of belonging to a domestic terror organization with plans to overthrow the government and replace it with German nobility in a throwback to pre-Weimar times. Some 3,000 police conducted raids in several German states as well as in Austria and Italy, detaining people associated with the Reichsbürger, a right-wing German conspiracy group, the far-right Alternativ für Deutschland party, and at least one Russian citizen. You’ll likely remember that a member of the AfD – a euroskeptic party that has capitalized on anti-immigrant sentiment in recent years to grow its base – tweeted after the Jan. 6 riot at the US Capitol that "Trump is fighting the same political fight — you have to call it a culture war." Harboring beliefs that Germany is being run by a “deep state'' (sound familiar?), the group reportedly planned to launch an armed attack on the Reichstag, Germany’s parliament. This is just the most recent reflection of a far-right extremist problem in Deutschland. Last year, the German government placed the AfD under surveillance for its far-right extremist affiliations, and early this year the government found that more than 300 employees in Germany's security apparatus harbored far-right views.
Peruvian president ousted after trying his own coup
Peru's Congress voted Wednesday to remove President Pedro Castillo after he tried to dissolve parliament and declared a state of emergency to rule by decree in a bid to thwart an impeachment vote. Castillo's sudden move sparked mass resignations within his cabinet and the military, while his critics called it an autogolpe or self-coup like the one former President Alberto Fujimori successfully pulled off 20 years ago. Back then, the army helped the right-wing strongman stay in power for a decade — but this time the leftist Castillo had neither the support of the army nor Fujimori’s popularity. By nightfall, he was arrested. In his 17 months in power, Castillo, a former schoolteacher who rides on horseback and waves a giant pencil, has taken political instability to a record high even by Peruvian standards — he’s reshuffled his cabinet five times, had six criminal probes filed against him, and survived two impeachment bids. What happens next? VP Dina Boluarte was sworn in for the top job as Peru’s first female leader, but she may not last long: Peru churned through three presidents in a month in 2020 almost a year before Castillo won a nail-biter runoff election against … Fujimori’s daughter.
Xi goes to Saudi
China’s President Xi Jinping doesn’t leave the country often these days, but on Wednesday he began a three-day trip to Saudi Arabia. Xi, the leader of the world’s largest oil importer, is expected to sign trade agreements worth more than $29 billion with the Saudis, one of the world’s leading oil behemoths. In recent years, however, Russia has surpassed Riyadh as the top oil exporter to Beijing, and Saudi Crown Prince Mohammed bin Salman is keen to address that. The trip will also include a China-Arab and China-Gulf Cooperation Council summit. Indeed, the visit is a sign of the deepening relations between the two states at a time when relations between the US and Saudi Arabia, longtime allies, have steadily deteriorated due to personal animosity between President Joe Biden and MBS. Crucially, Beijing is now Riyadh’s largest trade partner, with exports to China surpassing $50 billion in 2021. And earlier this year, MBS and Xi cemented a $10 billion deal to create a Saudi Aramco oil refinery complex in China. To be sure, these close ties have been in the making for some time as Saudi Arabia has sought to diversify its trade portfolio, and Beijing has looked for new ways to expand its global economic clout. Washington will be watching very closely for new signs of cooperation.
Taiwan’s big investment
Twenty years ago, the US produced 37% of the world’s semiconductors, a product essential for the functioning of everything from smartphones and automobiles to digital-age weapons and fighter planes. Today, that percentage stands at just 12%, exposing the US economy and its military to supply-chain problems that create dangerous shortages. Adding to the risk, about 90% of the world’s most advanced chips are now produced in Taiwan, a self-governing island that Washington treats as an ally and Beijing insists is a breakaway Chinese province. These are two of the reasons why it’s a big deal for the US that the Biden administration and Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker, announced on Tuesday that the company would more than triple its planned investment in a new US plant to $40 billion – one of the largest foreign investments in US history. TSMC has also pledged to build a second plant by 2026 that produces some of the most sophisticated chips currently in production. The plan will leave the US less vulnerable to the kind of chip shortages it saw during the pandemic and could see during any future conflict between China and Taiwan. Nor will it hurt President Joe Biden that this investment will eventually create thousands of tech jobs in Arizona, one of the most hotly contested battlegrounds on the US electoral map.