BERLIN
Chancellor Friedrich Merz may have survived the triumph of the far right in this month’s state elections in eastern Germany and Berlin but the shock to his coalition could force him to water down his promised reform agenda.
Merz took the unusual step of announcing immediately after exit polls showed his conservatives were on course for their worst-ever defeat that he would stay in office to get a raft of reforms to the tax, pensions and health systems through parliament.
His partners in the centre-left Social Democrats (SPD), who also lost heavily in elections in Saxony-Anhalt and Berlin while holding on in Mecklenburg-Western Pomerania, also pledged to continue their alliance with his Christian Democrats (CDU). But there has been increasing pressure from within the coalition for the government to do something to reflect the votes.
“There can’t be a simple carrying on as normal after the state elections,” an SPD strategy document circulated this week said, calling for a “German ‘New Deal’ that doesn’t leave people alone in a period of transition”.
It said a special party meeting would be called in December where the leadership would issue new policy proposals.
Despite stronger-than-expected growth in the first half of the year, surveys showed Sunday’s election results were heavily influenced by squeezed living standards and voter worries over economic issues, notably rising inflation.
Aware of the mood of the electorate, two days before Sunday’s votes in Berlin and Mecklenburg-Western Pomerania, Merz announced a €2.5 billion tax cut and plans for a price cap to help motorists deal with fuel prices sent soaring by the Iran war.
There has also been pressure from his partners to change sections of the reform package that have drained support for the ruling parties in the eastern German states which voted this month, including plans to change the rules on retiring early.