The day after the CDU’s win in Rhineland-Palatinate, Chancellor Friedrich Merz struck an upbeat tone, saying the victory gives momentum to the government’s reform agenda in Berlin. He urged progress with coalition partner the SPD, stressing the need to move quickly on migration and internal security and to accelerate measures for economic growth, competition and employment.
The conservative CDU/CSU bloc has governed with the center-left SPD for just over ten months, but tangible results remain limited. After three years of recession, the promised recovery has not materialized. Global instability — notably the war involving Iran — is weighing on the world economy and Germany’s export-dependent economy. Domestically, Germany faces looming fiscal strain from an ageing population: rising costs in health care and long-term care, and an increasing pension budget gap as fewer workers support more retirees. At the same time, voter discontent is boosting support for the far-right AfD.
To address these pressures, the coalition has set up special commissions. Initial recommendations on long-term care were due in March, proposals for health care reform by April, and pension reform findings by the end of June. Those recommendations must be turned into draft legislation and passed to the Bundestag before the summer recess — a tight timeline that leaves little room for delay.
That deadline comes at a difficult moment for the SPD. The party performed disastrously in early 2026 state votes: it barely cleared the 5% threshold in affluent Baden-Württemberg with 5.5%, and in Rhineland-Palatinate it was pushed into second place after 35 years, recording its worst result there. National polling places the once-dominant workers’ party at roughly 14–16%, reflecting a long decline that worries members and allies alike.
Calls for leadership change have grown, but SPD co-chairs Lars Klingbeil (who is also finance minister and vice-chancellor) and Bärbel Bas (labor minister) have resisted resigning, arguing that wholesale personnel upheaval would be counterproductive at a critical moment. The party executive favors settling on a clear programmatic and strategic course rather than replacing leaders. Still, restive elements within the SPD, especially on the left, are pushing for stronger responses to the electoral slump. The party planned a broad discussion of consequences and future direction for March 27, involving leadership and state and municipal representatives.
The coalition faces fundamental disagreements about how to finance and structure the necessary reforms. The CDU/CSU favor tightening social benefits and oppose higher taxes on the wealthy; the SPD rejects cutting core social protections and pushes for redistributive measures to stabilize systems. CSU leader Markus Söder warned the SPD against moving further left, urging “reforms, but with the right balance.” SPD leaders rebut that shrinking the welfare state won’t revive growth, citing failed 1990s approaches, and argue the party must stop avoiding contentious reforms that could alienate voters.
With three more state elections scheduled in September — two in eastern states and one in Berlin — campaigning will begin this summer. That makes the race against the calendar real: by midyear the coalition needs visible reform momentum. Failure to produce and begin implementing credible solutions risks further electoral losses for the SPD and erodes public confidence in a government already under pressure from economic stagnation, demographic challenges and international turbulence.
This article was originally written in German.