The Politics of 2025: the view from Berlin

Ahead of the 2025 federal elections in February, Germany is grappling with a complex set of challenges that threaten its economic prospects and political capacity to act. Germany’s reliance on Chinese markets as an industrial lifeline clashes with growing demands for technological sovereignty and security – especially under a Trump administration – while strained relations with France and Poland hinder collective European reforms.

These immediate pressures compound deeper weaknesses. Germany is suffering from decades of underinvestment in infrastructure, innovation, and public services coupled with declining demand for German exports, heavy bureaucracy, and inefficient digitalization.  Somehow its policymakers expect this platform to deliver ambitious plans for the green transition steep rises in defence spending - all within the constraints of the constitutional debt limit.

Political solutions for these challenges need political stability and a high degree of consensus. It is far from clear that these are things the German political system can deliver in 2025. The surge of the AfD, now polling as the second-strongest force behind the more centrist CDU/CSU, and the emergence of the BSW as a viable player at the federal level, have upended conventional political dynamics. Some form of coalition is inevitable. But the quarantining of the AFD and DSW and the fact that the pro-business FDP and the socialist Left may both fall below the 5% threshold for Bundestag representation mean limited options and tactical dilemmas. Any agreement risks being fragile.  

Once a government is formed, it will face immediate stress tests. First, there is a backlog of urgent, contentious draft legislation – from energy policy and defence spending to reforms for industrial competitiveness. Second, the budgetary conundrum that led to the previous coalition’s collapse burdens the new government with the need for an urgent resolution. The provisional 2025 budget must be finalised alongside a comprehensive financial plan for 2026. These negotiations will immediately test the durability of coalition compromises, as fiscal realities and material constraints clash. If there is a leader capable of delivering this consensus, they are not yet obvious. 

This has European implications also. Collective action on defence, economic reform, and technological autonomy at the EU level could all work in Berlin’s favour.  However, relations within the critical ‘Weimar Triangle’ of Germany, France, and Poland are strained to put it mildly. While Germany and France remain the EU’s economic core, Poland has become a crucial player among security-oriented Northern and Eastern European states critical of Germany’s uncertain stance on Ukraine. Without repairs to this misalignment, the progress Berlin wants in Brussels will be much harder to achieve. Poland’s 2025 presidential elections and France’s political instability will not make this simple.  

All this makes 2025 an exceptionally important year for Germany. Engagement with the policy agenda will be complex and – probably - frustrating. But it is not an overstatement to say that Germany’s challenge is to replace the political and policy playbook of the last quarter century with something that rises the challenge of the next quarter.   

The Politics of 2025 programme of events and content reviews and debates the political and policy landscape in 2025, featuring insights from our expert team and leading external commentators. From escalating geopolitical tension to a new political landscape amid turning-point elections, and technology-driven change in a rapidly evolving world, The Politics of 2025 builds into a picture of the world of business, politics and policy in 2025.

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