Conservative leader Friedrich Merz won the German election on February 23, 2025, his victory has significant implications for the European Union. As Germany is the largest economy and a key political player within the EU, its government’s policies have a profound impact on the broader European landscape. The new administration under Merz will influence economic policy, security strategies, migration management, and the EU’s geopolitical standing. With the CDU regaining leadership, the direction of Germany’s policies may shift towards a more conservative and business-oriented approach, shaping how the EU navigates internal and external challenges in the coming years. One of the most immediate implications of Merz’s leadership is the potential shift in the EU’s economic framework. Germany has historically championed financial discipline and stability, often pushing for strict fiscal policies. Under Merz, there is likely to be a reinforced commitment to economic conservatism, emphasizing lower public debt and restrained government spending. This could influence ongoing discussions about EU fiscal rules, particularly the Stability and Growth Pact, which regulates national budgets within the bloc. Countries favoring increased public investment to stimulate growth may find Germany’s stance more rigid, potentially leading to tensions over the EU’s economic recovery efforts. Furthermore, Germany’s industrial policies will set the tone for European competitiveness, as the country remains a key driver in manufacturing, innovation, and trade relations. A stronger emphasis on deregulation and business-friendly policies could accelerate economic growth but may also create disparities between member states with differing economic priorities.

Another major area of impact is European security and defense policy. With growing concerns over geopolitical instability, particularly regarding Russia’s actions in Ukraine, Germany’s position on military investment and NATO cooperation will be closely watched. Merz has signaled a more assertive stance on security matters, advocating for higher defense spending and a greater commitment to EU-wide security coordination. This could lead to stronger efforts in developing Europe’s defense capabilities, reducing reliance on the United States for military protection. Germany’s new approach may push the EU towards strategic autonomy, reinforcing joint military initiatives and increasing funding for defense projects. However, it remains to be seen whether other EU members will align with this vision, as differing national interests often complicate collective security strategies.

Migration policy is another critical aspect that will be influenced by Merz’s leadership. His party has consistently pushed for stricter immigration controls, advocating for tighter border regulations and more efficient deportation processes. If Germany enforces stricter immigration policies, this could set a precedent for the EU as a whole. There may be increased pressure on the EU to adopt more restrictive asylum rules, reinforcing external border protections and reconsidering burden-sharing mechanisms among member states. While this may appeal to governments seeking tougher migration measures, it could also create divisions within the bloc, particularly with countries that prioritize humanitarian approaches to asylum and refugee management. Balancing security concerns with fundamental EU values on human rights and integration will be a challenge under Germany’s new government.

Merz’s economic and foreign policy positions will also shape the EU’s relations with global powers. As tensions with China and Russia remain prominent, Germany’s approach to trade and diplomatic engagements will affect the EU’s broader strategy. Under Merz, there is likely to be a more cautious stance on economic dependence on China, with potential policies aimed at reducing vulnerabilities in key sectors such as technology and energy. At the same time, Germany’s position on Russian sanctions and support for Ukraine will play a crucial role in shaping EU unity on foreign policy. A stronger alignment with transatlantic allies, particularly the United States, may also emerge, reinforcing cooperative efforts in defense, trade, and technology.

The relationship between Germany and France, which is central to EU decision-making, may also experience shifts under Merz’s leadership. While both countries share common interests in strengthening the EU, differences in economic policies and defense strategies could lead to policy disagreements. France has advocated for more ambitious EU integration, including greater financial solidarity and defense collaboration, while Germany under Merz may adopt a more cautious approach to deepening financial commitments within the bloc. Maintaining a balanced Franco-German partnership will be essential to ensuring stability and coherence in EU governance.

Energy policy will also be an area of focus as Germany’s stance influences the EU’s green transition. While Germany has been a leader in renewable energy investments, Merz’s government may take a more pragmatic approach to the energy mix, including revisiting nuclear energy policies and securing energy independence. This could impact the EU’s broader sustainability goals, particularly in aligning climate objectives with economic growth and energy security. A recalibration of energy strategies may be necessary to accommodate both environmental ambitions and the need for stable and affordable energy supplies.

As Germany navigates coalition negotiations to form a stable government, the EU will be closely monitoring how Merz’s administration translates campaign promises into policy actions. The outcome of these discussions will determine the extent to which Germany influences EU regulations, financial frameworks, and geopolitical strategies. A well-functioning German government with clear policy directions can provide stability and leadership within the EU, while prolonged negotiations or internal divisions could create uncertainties in European decision-making.

In conclusion, Friedrich Merz’s election victory represents a turning point for Germany and the European Union. His leadership will shape economic policies, defense strategies, migration regulations, and international relations, all of which have significant implications for the EU’s future direction. While some member states may welcome Germany’s renewed focus on fiscal discipline and security, others may express concerns over potential policy shifts that could create divisions within the bloc. The coming months will reveal how Germany’s new government positions itself within the EU and whether it fosters greater unity or introduces new challenges to European integration. Regardless of the specifics, Germany’s role as a leading EU nation ensures that its domestic political decisions will continue to influence the entire European project in the years ahead.

By Yuxing Tao