The German Elections Are Crazy

Key Takeaways

The 4 Key Issues Defining Germany’s 2025 Election – Voters are focused on the economy, energy costs, immigration, and security.
The Possible German Government Coalitions – Two likely coalition options could shape Germany’s political future.
The 5% Threshold – The fate of the next government may hinge on whether a small party reaches the critical 5% mark.
Germany’s Center-Right Coalition – This alliance would prioritize tax cuts, strict immigration policies, and a shift in energy strategy.
The “Kenia Coalition” – A likely but unstable coalition with mixed policies on taxation, immigration, and climate goals.
No matter which coalition wins, Germany’s next government could risk a major political shift in future elections.

Introduction

Germany is facing one of the most crucial elections in its history, with the country’s future hanging in the balance. After months of political instability, economic downturn, and growing concerns over national security, German voters will finally decide on a new government. This election is not just about choosing a new chancellor – it’s about shaping the direction of Germany’s economy, immigration policies, energy strategy, and foreign relations for years to come.

Unlike past elections, where outcomes were relatively predictable, this year’s election is highly uncertain. The political landscape is more divided than ever, with two potential governing coalitions – one leaning toward center-right policies with tax cuts and stricter immigration controls and the other favoring progressive social programs, increased government spending, and climate initiatives. With Germany’s economy shrinking for a second consecutive year, energy prices soaring, and inner security concerns rising, voters are demanding solutions.

This blog post will break down everything you need to know about Germany’s election, from the leading political parties to their key policies on taxation, immigration, energy, security, and foreign affairs. Whether you’re an expat living in Germany, a business owner, or simply interested in the country’s political future, this comprehensive guide will help you understand what’s at stake.

Now, let’s dive into the possible coalitions, their agendas, and how they plan to tackle Germany’s biggest challenges in 2025 and beyond.

The 4 Key Issues Defining Germany’s 2025 Election

With Germany at a turning point, we analyzed the election programs of all 7 major political parties (AfD, BSW, CDU/CSU, FDP, Greens, SPD, The Left) that could enter government. Regardless of which coalition takes power, four key topics will shape Germany’s future:

The Economy: Germany’s economy is shrinking for the second consecutive year – the first time in two decades. Economic recovery is the top priority, with parties debating tax cuts, business incentives, and energy policies to stimulate growth.
Immigration & Foreign Policy: Legal immigration policies matter to expats and international professionals. Some parties advocate for streamlined work visas and incentives for skilled workers, while others push for stricter border control and deportation of illegal immigrants.
Domestic Security: Crime rates and security concerns have surged, with violent incidents and terrorist-like attacks increasing. Each party proposes different strategies to restore public safety, from expanding police forces to increasing social programs.
Personal Finance & Social Benefits: From income taxes to investment benefits, health insurance, and pensions, the next government will decide whether Germany will continue its current system or make drastic financial policy changes.

These topics will impact not only German citizens but also foreign investors, expats, and businesses operating in Germany.

The Possible German Government Coalitions

The results of the German election 2025 will likely lead to one of two major coalition scenarios, as no single party is expected to win an outright majority.

Center-Right Coalition (CDU/CSU + AfD)

- A two-party coalition between the center-right CDU/CSU (Christian Democrats) and the right-wing AfD (Alternative for Germany).
- This combination would prioritize tax cuts, energy price reductions, stricter immigration controls, and increased policing for security.
- However, the CDU/CSU candidate has publicly stated he does not want to work with the AfD, though recent political moves suggest that this coalition remains a possibility.

Center-Left Kenia Coalition (CDU/CSU + SPD + Greens)

- - A three-party alliance between the CDU/CSU, the center-left SPD (Social Democrats), and the Greens.
  - This coalition would focus on climate policies, social benefits, and EU integration, while likely maintaining moderate immigration controls.
  - The biggest challenge? Balancing the conflicting priorities of three different parties makes it a potentially unstable government.

The 5% Threshold and the Role of the FDP

Germany’s 5% electoral threshold adds another layer of uncertainty. If the liberal FDP (Free Democrats) reaches 5%, they could enter parliament, opening up new coalition possibilities. However, current polls suggest that they might fall short.

This means that a tiny percentage of votes could determine Germany’s entire political future. If FDP secures 5%, new government combinations become possible; if they don’t, the CDU/CSU must decide whether to stick to its firewall against the AfD or form a complex three-party alliance.

As election day unfolds, the formation of the next government will be just as unpredictable as the election results themselves. Will Germany take a conservative turn, embrace progressive policies, or end up with a fragile coalition? The coming weeks will provide the answer.

Germany’s Center-Right Coalition of AfD + CDU/CSU

As Germany’s 2025 election unfolds, one potential governing coalition is a center-right alliance between the CDU/CSU (Union) and the AfD (Alternative for Germany). Both parties share common goals regarding tax cuts, lower energy costs, stricter immigration laws, and enhanced security measures. However, they diverge on key issues such as climate change, foreign policy, and Germany’s role in the European Union.

Tax Cuts and Economic Reforms: A Business-First Approach

Reducing taxes is one of the biggest promises from the Union and the AfD. Germany currently has one of the highest tax burdens in the world, and both parties aim to change that by introducing:

Lower corporate taxes to boost business investments and economic growth.
Lower personal income taxes, with more significant savings for higher earners.
Elimination of inheritance tax (AfD’s proposal), making it easier to pass down wealth.
Abolition of real estate transfer tax for owner-occupied homes (AfD’s proposal), making homeownership more accessible.

While these tax cuts may sound appealing to businesses and individuals, the big question remains: How will the government compensate for the lost revenue? Both parties insist they will maintain the Schuldenbremse (constitutional debt brake), meaning they cannot take on new debt. Without significant spending cuts, implementing these policies may be challenging.

Energy Policy: Nuclear Power vs. Climate Commitments

Germany’s energy crisis has become a major election issue, with skyrocketing prices putting pressure on households and businesses. Both the Union and AfD agree that energy costs must be reduced, but their approaches differ:

AfD favors nuclear energy and wants to restart Germany’s nuclear power plants.
Union is cautious, stating they will “evaluate” nuclear power’s feasibility.
AfD denies human-caused climate change, arguing that it’s a natural phenomenon.
Union commits to climate neutrality by 2045, maintaining Germany’s transition to renewable energy.

With Germany’s commitment to phasing out fossil fuels, the AfD’s stance on nuclear power could be controversial, especially among environmental advocates. The Union, meanwhile, tries to balance economic concerns with climate responsibility – a strategy that may influence coalition negotiations.

Immigration and Border Control: A Tougher Stance

For expats and international professionals, immigration policies will be a decisive factor in the upcoming election. Both the Union and AfD share similar views on legal and illegal immigration, focusing on:

Encouraging skilled expats to come to Germany for work and education.
Tighter border controls to prevent illegal immigration.
Deportation policies for individuals who do not contribute to society or lack legal status.

Despite fears that the AfD might adopt an anti-foreigner stance, their program does not explicitly suggest deporting law-abiding expats. Instead, both parties distinguish between legal immigrants (who are welcomed) and illegal migrants (who must leave).

However, the biggest policy gap between the two parties lies in foreign relations.

AfD wants to negotiate with Russia and stop sending aid to Ukraine.
Union supports Ukraine militarily and financially.
Union wants deeper European Union integration.
AfD proposes an EU exit referendum, questioning Germany’s membership in both the Eurozone and the European Union.

Germany’s role in the EU and NATO is a key issue, and if this coalition comes to power, AfD’s position on potentially leaving the Eurozone could create instability in financial markets.

Domestic Security: Restoring Law and Order

With rising concerns over violent crime and public safety, both the Union and AfD have made domestic security a priority. In recent years, reports have surfaced about increasing crime rates, unsafe public spaces, and even school staff wearing stab-proof vests.

Both parties agree on:

Increasing police presence in public areas.
Stronger enforcement of existing laws.
Cracking down on crime hotspots.

The difference?

AfD proposes hiring more police officers and increasing security funding.
Union does not provide specifics on how they plan to improve safety.

Given that 40% of Germans feel unsafe in public spaces, this is a major election issue that could determine voter preferences.

Personal Finance and Social Benefits: Work Must Pay Off

Both parties advocate for policies that ensure work is more financially rewarding than welfare. Their key proposals include:

Reducing welfare benefits (Bürgergeld) to incentivize employment.
Eliminating financial support for those who choose not to work.
Encouraging self-sufficiency and reducing government dependency.

These policies resonate with voters frustrated by the perception that social benefits are being misused. However, critics argue that such policies could disproportionately impact lower-income households.

Will This Coalition Be Financially Sustainable?

While tax cuts, lower energy prices, and stronger security sound appealing, the biggest question remains: How will these policies be funded?

Both the Union and AfD refuse to take on new debt, insisting on keeping the Schuldenbremse (debt brake) in place.
Germany already faces budget constraints, making large-scale tax reductions difficult without spending cuts.
Some critics argue that reducing welfare and bureaucracy may not be enough to balance the budget.

If this coalition comes to power, expect major debates on financial sustainability – especially if economic recovery remains slow.

A Coalition with Big Promises but Uncertain Execution

The potential center-right coalition between the Union and AfD offers bold economic reforms, stricter immigration policies, and a renewed focus on security. However, major differences remain in areas like climate policy, foreign relations, and Germany’s role in the EU.

While tax cuts and business incentives could boost growth, the lack of clarity on budget balancing raises concerns. Additionally, Germany’s commitment to Ukraine and the European Union could shift dramatically under this government.

As voters head to the polls, they must decide:

Is this the economic relief Germany needs?
Will tax cuts and energy reforms be enough to revive the economy?
And will security measures restore public confidence?

The answers will shape Germany’s political and economic landscape for years to come.

Make the most of your (financial) future here in Germany, no matter which coalition will be elected. We will help you finding the best solution for you.

The "Kenia Coalition" of CDU/CSU + SPD + Greens

Germany’s Kenia coalition, consisting of the black CDU/CSU (Union), red SPD (Social Democrats), and the Greens, represents a mix of center-right, center-left, and progressive policies. While this coalition could be more likely than a CDU/CSU-AfD alliance, it also comes with profound ideological differences that could lead to political instability.

Let’s break down the economic policies, energy strategies, immigration stance, domestic security measures, and financial implications of the Kenia coalition – helping you understand what’s at stake if this government takes power.

Energy Prices and Climate Policy: A Common Goal with Delayed Action

One of the few points of agreement among the Union, SPD, and Greens is the urgent need to lower energy prices. However, the big question remains: Why hasn’t this already happened?

The SPD and Greens have been part of the government since 2021, yet energy prices have remained among the highest in the world.
The coalition agrees on climate neutrality, but with different timelines:
- Greens aim for 2035 (a more aggressive timeline).
- Union and SPD target 2045, a slower approach to balancing economic concerns.

To finance Germany’s energy transition and economic recovery, the SPD proposes the Deutschlandsfonds, a €100 billion investment fund supported by both the government and institutional investors. However, critics argue that borrowing more money contradicts Germany’s Schuldenbremse (debt brake), which restricts new debt creation.

Overall, while the Kenia coalition talks about energy reform, their lack of past action raises doubts about whether meaningful change will happen.

Immigration and Foreign Policy: Welcoming Expats, Divided on Illegal Migration

For expats and international professionals, the Kenia coalition offers some of the most expat-friendly policies of any potential government:

All three parties agree on attracting more skilled workers to boost Germany’s economy.
Greens propose a digital visa system, making it easier for expats to work in Germany.
All three parties support a stronger European Union, aiming to compete with the US, China, and Russia.

However, major disagreements arise on illegal immigration and border control:

The Union (CDU/CSU) supports closing Germany’s borders to prevent illegal migration.
The SPD favors protecting the EU’s external borders rather than Germany’s national borders.
The Greens advocate for open borders, increasing refugee support and asylum protections.

These fundamental differences could lead to serious internal conflicts within the government, making immigration policy one of the biggest potential weak spots of the Kenia coalition.

Domestic Security: A Shared Priority but No Clear Plan

Germany’s public safety concerns have become a top election issue, with rising crime rates, unsafe public spaces, and increasing reports of violent incidents.

All three parties agree on improving domestic security – one of their few common policies.
However, there is no clear plan on how to achieve this beyond vague commitments to “restore inner security.”

The biggest divide in domestic policy comes in their philosophy on government intervention:

The Union favors individual responsibility and a free-market approach.
The SPD and Greens advocate for stronger government involvement, proposing:
- Raising the minimum wage.
- Expanding social benefits.
- Building more affordable housing.

Unless this coalition aligns its priorities, these policy differences could lead to a highly unstable government.

Personal Finance: What Does This Mean for Your Wallet?

If the Kenia coalition takes power, what financial changes should you expect?

Potential benefits:

Lower income taxes for lower earners.
Higher payouts from the German pension system (though its long-term sustainability is uncertain).

Potential downsides:

Higher taxes for the wealthy, as SPD and Greens favor progressive taxation.
Increased government spending, which could raise financial burdens on businesses.
The possible elimination of Germany’s dual public-private health insurance system, as the SPD and Greens want a unified healthcare system.

However, critics argue that a universal healthcare system is unlikely to happen because:

Many government employees and politicians are privately insured – and would not want to give up their benefits.

Overall, higher-income earners and businesses may face greater financial burdens, while lower-income groups could see increased benefits under this coalition.

Can This Coalition Deliver on Its Promises?

While the Kenia coalition presents itself as a progressive and pro-EU government, its deep ideological differences could result in unstable leadership and ineffective policy implementation.

Key questions remain:

Why haven’t the SPD and Greens already lowered energy prices while in power?
Can this government find a middle ground on immigration policy?
Will the coalition’s economic and financial policies be sustainable, or will they lead to higher taxes and debt?

With contradictory policy goals and a history of broken promises, the Kenia coalition faces major challenges if it hopes to provide strong, stable leadership for Germany’s future.

Conclusion: A Defining Moment for Germany’s Future

As Germany stands at a political crossroads, the outcome of this election will shape the country’s economic stability, security policies, and global position for years to come. Despite the significant ideological differences between the Union, SPD, and Greens, the Kenia coalition remains the most likely government formation. While the alternative center-right coalition of the Union and AfD could theoretically emerge, it faces strong political resistance.

Regardless of which coalition takes power, two things are clear:

Germany’s new government must do a better job than the previous administration. If the Kenia coalition fails to deliver meaningful improvements – especially on the economy, energy costs, and security – voter frustration will continue to grow. This could lead to a major political shift in the next elections, with support swinging further left or right, deepening the nation’s divisions.
Democracy must be protected at all costs. Recent concerns about election integrity in Europe have raised alarms. Former European Commissioner Thierry Breton suggested that elections in Romania were canceled due to unfavorable results, and that Germany could face a similar threat. If that were to happen, it would be a devastating blow to democracy. The right to vote is the foundation of a free society, and any attempt to suppress election outcomes should be strongly opposed by the German people.

As the election results unfold, all eyes will be on whether Germany’s new government can deliver real change – or whether broken promises and political instability will push voters toward more radical alternatives in the future. One thing is certain: Germany’s political landscape is shifting, and the next few years will determine the country’s long-term direction.