Key facts
- EU partners are planning for the prospect that German Chancellor Friedrich Merz could be ousted or distracted.
- Two European governments have held internal sessions to discuss the end of Merz's chancellorship.
- Merz leads the EU's largest economy and is a key negotiator for wealthy countries seeking to rein in spending on the bloc's proposed €2 trillion seven-year budget.
- Germany, Sweden, Finland, Denmark, Austria and the Netherlands are pressing for overall reductions in the EU budget.
- Germany lost around 124,100 industrial jobs last year, according to an analysis by EY.
European Union officials and diplomats are increasingly planning for the possibility that German Chancellor Friedrich Merz could be ousted or significantly weakened due to mounting domestic political challenges. This contingency planning, described by five anonymous sources familiar with the sensitive talks, reflects concerns that Germany's ability to lead on crucial EU matters could be compromised.
Two European governments have already conducted internal sessions to strategize for the potential end of Merz's chancellorship. Merz, leading the EU's largest economy, is a pivotal negotiator in the bloc's proposed €2 trillion seven-year budget and a key proponent of measures to support heavy industry. His political struggles at home, marked by election losses and internal coalition disputes over social care policy, are causing unease in Brussels.
"Any debate about the German chancellor weakens Germany's role in the EU and in the world," said Wilhelm Gebhard, a member of the Bundestag and an official in Merz's governing CDU party. The prospect of Germany turning inward or derailing negotiations is particularly worrying for EU partners, especially with France also facing a surge in far-right support.
Officials and diplomats have been brainstorming scenarios following months of mixed signals from Berlin on EU policies, including car emissions and a proposed social media ban for children. Even if Merz remains in office, the political turmoil complicates Berlin's work on major EU files. The worst-case scenario for Brussels would be a leaderless Germany or one led by a far-right government, though this is considered unlikely in the short term due to the mainstream parties' reluctance to call early elections.
"All coalition partners know that they have a great deal to lose from early elections," said Hannah Neumann, an opposition Green MEP. "My expectation, therefore, is that they will stay together and muddle through." Should Merz be forced to resign, he would be immediately replaced by a successor from his party or the SPD, providing some assurance that Germany will always have a leader.
Despite his domestic weakness, allies insist Merz will remain engaged in EU affairs. "For him it’s just the opposite: It’s an additional incentive to show leadership in Europe,” said a person familiar with the chancellor’s thinking. However, his political vulnerability at home might push him to adopt a harder stance on the EU budget, seeking a win to bolster his domestic standing. Germany, along with Sweden, Finland, Denmark, Austria, and the Netherlands, is advocating for significant budget cuts, while net recipient countries like Poland and Romania seek to protect their funding.
"Nobody who could replace him as chancellor 'would be able to be more flexible than Merz is,'" said one diplomat, adding that "the risk is he has to show his self-perceived leadership in Brussels in the hope it will help his standing in Germany." Another envoy noted that Merz's domestic weakness means "he can't compromise" and needs to be seen as achieving budget cuts.
Allies argue that Merz's international influence depends on domestic stability. "Strength comes not just from grand appearances in Brussels, but above all from stability, reliability and the ability to push through decisions at home. That is precisely what is lacking at the moment," said CDU Bundestag member Fabian Gramling.
The fractious relationship between the CDU and SPD has already undermined Berlin's position on critical issues. In 2025, disagreements over phasing out combustion engine cars, influenced by lobbying from the automotive sector, left German officials unable to present a clear stance. Ultimately, Commission President Ursula von der Leyen and EPP chief Manfred Weber intervened to block the proposal.
Similarly, the coalition struggled for over six months to agree on a specific age limit for a proposed EU-wide ban on children using social media, a flagship initiative from von der Leyen. Merz personally supported the idea but faced internal divisions on the lobbying position.
Merz's domestic troubles have also impacted high-level EU discussions. Last year, he surprised leaders by advocating for a summit to focus on protecting European heavy industry from competition with the U.S. and China, citing concerns about deindustrialization contributing to the rise of rival parties. Germany lost approximately 124,100 industrial jobs last year, according to EY.
Even within Merz's own CDU, consensus on industrial policy is lacking. Foreign Minister Katherina Reiche is perceived as more favorable towards maintaining relations with Beijing and German industrial giants that trade with China, contrasting with the Commission's planned actions against unfair Chinese trade practices.
In a speech on Thursday commemorating German reunification, the country's ambassador to the EU, Thomas Ossowski, emphasized the importance of European unity, stating, "whenever we celebrate German unity, we celebrate European unity. And we need this unity [now] more than ever."