Merz under pressure: Will he break his election promises and follow Trump?

Merz under pressure: Will he break his election promises and follow Trump?

Friedrich Merz (CDU) has been under strong pressure since his election as Chancellor almost two months ago. Internally there are considerable tensions in the coalition because Merz has not yet fulfilled some key election promises. In particular, the cross-industry relief from electricity taxes for businesses and private households, which was considered one of his central promises, has come under criticism. Associations speak of a breach of word on the part of the Chancellor and are calling for implementation and clarity regarding the announced relief measures. Merz, on the other hand, pushed through new billions in spending on defense and infrastructure in the old Bundestag, which raises questions about the financial basis of these projects. According to a forecast by Commerzbank, German national debt could rise to around 2.47 trillion euros by 2034, which corresponds to almost 90 percent of gross domestic product.

The influence of these developments on the German economy is being followed with interest. Although Germany remains below the critical debt mark in international comparison, the gap to countries like France, where the debt ratio could rise to a forecast 143 percent of GDP, is viewed critically. Merz is accused of moving away from the economic policy principles of the federal CDU and yet taking a course that reflects Donald Trump's approach to debt. Trump had pursued a policy of tax cuts that drove up the national debt - a strategy that Merz now appears to be copying.

Controversial debt brake

The debt brake, which Merz described as unchangeable during the election campaign, is also becoming a point of contention. The SPD accuses Merz of breaking an election promise. The SPD leader Lars Klingbeil commented positively on Merz's rapid change of opinion on the debt brake, while the outgoing SPD parliamentary group leader Rolf Mützenich angrily pointed out the contradictions. Merz had taken a clear position that, in his view, maintaining the debt brake without reform was not possible, which was also taken up by Chancellor Olaf Scholz. Scholz criticized that higher defense spending could only be achieved through a reform of the debt brake, but Merz countered that he was counting on a growing economy and would like to reopen the discussion about the debt brake.

During the election campaign, Merz discussed the need for a new special fund, but ruled out reforming the debt brake in the near future. These contradictions and the adherence to expensive election gifts could lead to at least one central election promise being finally abandoned. In addition, the political content of Merz's agenda is attracting increasing attention: the idea of ​​possible tax increases, although excluded in the coalition agreement, is circulating among coalition members.

View at international level

Amid these domestic political challenges, Merz has also turned its focus internationally. He is actively promoting a capital markets union with French President Emmanuel Macron to open up private sources of financing and improve access to equity for European companies. Merz emphasizes the need for a broad and deep capital market, but contradicts the existing agreements in the coalition agreement, which rejects fully communitized deposit insurance.

Conclusion: Friedrich Merz's chancellorship is increasingly being shaped by the question of whether he can meet domestic political expectations while at the same time keeping an eye on international benchmarks. Trump's economic policy legacy and the resulting parallels to current German politics shed thoughtful light on the challenges facing Merz.