After the CDU’s win in Rhineland-Palatinate, Chancellor Friedrich Merz struck an optimistic tone, saying the result should give fresh momentum to the coalition’s reform drive in Berlin. He called on coalition partner the SPD to accelerate work on migration and internal security while stepping up measures to boost growth, competition and jobs.
The conservative CDU/CSU have governed with the centre-left SPD for just over ten months, but concrete achievements are still scarce. After three years of recession, the economic recovery promised by the coalition has yet to appear. Global instability — including the war involving Iran — is weighing on the world economy and on Germany’s export-dependent industries. At home, demographic trends are creating growing fiscal pressure: health and long-term care costs are rising and the pension system faces an expanding budget gap as fewer workers support more retirees. Meanwhile voter frustration is feeding support for the far-right AfD.
To cope with these challenges the coalition created special commissions. They were tasked with delivering initial recommendations on long-term care by March, health-care reform proposals by April and pension reform findings by the end of June. Those outputs must be converted into draft laws and sent to the Bundestag before the summer recess — a tight timetable that leaves little margin for delay.
The deadline coincides with a turbulent moment for the SPD. The party suffered heavy defeats in early 2026 state contests: it narrowly cleared the 5% hurdle in affluent Baden-Württemberg with just 5.5%, and in Rhineland-Palatinate it fell to second place for the first time in 35 years, recording its worst result there. Nationwide polling now places the once-dominant workers’ party at roughly 14–16%, a long-term decline that alarms members and coalition partners.
Calls for a change of leadership have grown, but SPD co-chairs Lars Klingbeil (also finance minister and vice-chancellor) and Bärbel Bas (labor minister) have resisted stepping down, arguing that wholesale personnel upheaval would be counterproductive at a critical juncture. The party executive prefers to settle on a clearer programmatic and strategic direction rather than replace its leaders. Still, restive factions — especially on the left — press for a stronger response to the electoral slump. The SPD scheduled a wide-ranging discussion of consequences and future direction for March 27, involving national leaders and state and municipal representatives.
The coalition is also split over how to pay for and design the needed reforms. CDU/CSU politicians favour tightening social benefits and reject higher taxes on the wealthy; the SPD refuses cuts to core social protections and pushes for redistributive measures to shore up systems. CSU leader Markus Söder has warned the SPD against shifting further left, urging “reforms, but with the right balance.” SPD figures counter that rolling back welfare won’t revive growth — citing the failures of 1990s austerity — and say the party must stop shying away from difficult reforms that may alienate parts of its base.
Three more state elections are set for September — two in the east and one in Berlin — so campaigning will begin this summer. That hardens the midyear deadline: by then the coalition needs visible reform momentum. Failure to produce and begin implementing credible solutions risks further electoral losses for the SPD and undermines public confidence in a government already tested by sluggish growth, demographic pressures and international turmoil.
This piece was originally written in German.