Friedrich Merz is Germany's hope?

Germany is the linchpin of Europe, and its fate carries profound consequences for the entire continent. Accounting for a quarter of the European Union's economic output, Germany is in the midst of a troubling recession that threatens to stretch into its third consecutive year. Meanwhile, concerns over uncontrolled migration have fueled the rise of hard-right politics, fracturing the political landscape and paralyzing Germany’s government. This gridlock is not only hurting Germany, but is also stalling progress across the EU.

Germany’s once-thriving business model, built on manufacturing exports—especially to China—cheap Russian gas, and American security guarantees, has come crashing down. The upcoming election on February 23rd could determine whether a new direction is possible. There’s a clear frontrunner: Friedrich Merz, the 69-year-old leader of the Christian Democratic Union (CDU), who is poised to secure a victory. However, the real question is: what comes next?

Merz and his Bavarian sister party, the CSU, are expected to win around 30% of the vote, a solid lead, but far from a majority. Coalition talks will drag on for months, and the precise composition of the next government is uncertain. Will Merz align with the Social Democrats, the Greens, or seek a more unorthodox partnership? Such coalition negotiations are likely to be a frustrating and lengthy process—just like the disastrous three-party coalition currently led by Chancellor Olaf Scholz, which has failed to provide any direction for Germany or Europe.

However, the bigger question is whether Merz, with his largely untested leadership experience, can actually deliver the kind of change Germany desperately needs. Unlike his political rivals, Merz has never held a cabinet position, and his business career has been more advisory than executive. Though his intellectual rigor and calm demeanor are commendable, the stakes are high. Can he transform a fractured Germany? And given that Europe thrives on strong Franco-German leadership, how will he engage with a French president in Emmanuel Macron who is, at best, a fading force on the European stage?

There is much to like about Merz. His instincts align with conservative values: he is an advocate for free markets, free trade, and a strong Atlantic alliance. His focus on cutting red tape and reforming Germany’s bureaucratic culture is a welcome promise. Importantly, Merz recognizes the gravity of the immigration crisis and acknowledges that solving it is critical to curbing the rise of the far-right, including the Alternative for Germany (AfD). He understands that time is running out, warning that “This could be one of our last opportunities to resolve the problems before the populists win a majority.”

But while these stances are encouraging, Merz’s approach often feels too cautious, too incremental for the challenges Germany faces. For example, he has expressed support for an EU-wide banking union, an essential step toward strengthening the European single market. Yet in the same breath, he opposed the takeover of Germany’s Commerzbank by Italy’s UniCredit, citing the bid as “hostile.” This is precisely the kind of deal that the EU’s single market should encourage to increase competitiveness. His reaction here suggests a preference for domestic protectionism over the kind of economic integration that Germany, and Europe, desperately need.

Merz’s stance on fiscal policy is similarly problematic. Germany’s constitution contains a “debt brake” that prevents the government from running substantial deficits, but this has left the country unable to adequately invest in its infrastructure, defense, or social services. When pressed on whether he intends to revise this constraint, Merz hedged, suggesting only that "I'm open to discuss that, but it is not our first approach." Germany’s fiscal conservatism is a point of national pride, but Merz must acknowledge that, in the face of rising global challenges, his cautious approach to fiscal reform may leave the country stuck in neutral.

The defense question is perhaps the most urgent. With Russia’s full-scale invasion of Ukraine, NATO’s 2% GDP defense spending target no longer seems adequate. Germany is still lagging behind, and with the special defense fund set to expire soon, Merz must commit to a more robust defense strategy. This will not be easy—especially given the political sensitivities around increasing defense spending. Yet if Germany is not willing to step up, no one will. This is particularly crucial given the likelihood that American support for NATO could diminish under a second-term Donald Trump, who may seek to negotiate with Russia over European heads.

The looming threat of immigration remains one of the most divisive issues facing Europe. The perception that Europe’s borders are not secure has pushed voters toward extreme parties, disrupting mainstream politics. While Merz has taken bold steps to address this—such as proposing restrictions to passport-free travel in Europe—his efforts have been clumsy and counterproductive. By introducing a non-binding motion in the Bundestag calling for a breach of Germany’s commitments to open borders, he found common ground with the AfD, reinforcing the perception of a dangerous alliance and alienating key supporters. Effective leadership on immigration requires more than just symbolic gestures; it requires a clear and firm commitment to securing Germany’s borders and forging a coherent European immigration policy.

Ultimately, the challenge for Friedrich Merz is not merely winning the election—it’s leading a country and a continent in crisis. To navigate the coalitions, push through difficult reforms, and restore Germany’s leadership in Europe, Merz must be far more ambitious than he has been to date. If he continues to embrace a timid, incremental approach, he risks repeating the mistakes of his predecessors, condemning Germany—and by extension, Europe—to more years of drift. The question is not just whether Merz will win the election, but whether he can seize the moment and lead the change that Germany and Europe desperately need.