Friedrich Merz hopes to form a government by Easter as European countries stunned by Donald Trump's policies look to Germany for leadership. AFP
Friedrich Merz hopes to form a government by Easter as European countries stunned by Donald Trump's policies look to Germany for leadership. AFP
Friedrich Merz hopes to form a government by Easter as European countries stunned by Donald Trump's policies look to Germany for leadership. AFP
Friedrich Merz hopes to form a government by Easter as European countries stunned by Donald Trump's policies look to Germany for leadership. AFP

German election winner Friedrich Merz plans to ‘drastically’ cut immigration


Tim Stickings
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German election winner Friedrich Merz has set his sights on “drastically limiting migration” under a new government, as he aims to make support “disappear” for the jubilant far-right party which finished second.

Mr Merz's Christian Democrats were preparing for coalition talks on Monday with the aim of making him Chancellor by Easter, as European countries look to Germany for leadership in the wake of Donald Trump's decision to disengage. Voters delivered a scathing verdict on outgoing Chancellor Olaf Scholz as his Social Democrats (SPD) slumped to third in their worst result since the Second World War.

The humbled SPD now appears to be Mr Merz's most likely coalition partner after he confirmed he would not strike a deal with the far-right Alternative for Germany (AfD), which won a record 20.8 per cent of the vote. “You can forget this option,” Mr Merz said.

The path to a new government was made clearer on Monday as a small Russia-friendly party finished on 4.97 per cent of the vote, just short of the five per cent threshold needed to enter parliament. It means a “grand coalition” between Mr Merz's bloc and the Social Democrats would have a majority without needing a third partner such as the Greens.

An agreement on cutting immigration may prove tricky, however, with Social Democrats queasy about Mr Merz's plans to turn away asylum seekers at German borders. More than 250,000 people sought refuge in the country last year. Almost a third of them came from Syria and large numbers arrived from Afghanistan and Turkey.

Mr Merz also wants to carry out deportations to post-Assad Syria; water down reforms that made it easier for Syrians and Turks to claim German nationality; and add a condition that new citizens must support Israel's right to exist. The AfD had seized on a spate of violent attacks involving Syrians and asylum seekers to call for mass deportations from Germany.

“It is beyond dispute that we have to drastically limit migration to Germany,” said Mr Merz, as he said his aim was to cut off the AfD's support by “solving the problems” fuelling its support. “As soon as problems are solved, this party will disappear,” he said.

Chancellor Olaf Scholz's Social Democrats slumped to the worst result in their post-war history. Bloomberg
Chancellor Olaf Scholz's Social Democrats slumped to the worst result in their post-war history. Bloomberg

Analysis by The National reveals the AfD thrived in parts of Germany with relatively little immigration, while diverse major cities leaned more to the left. Older and rural areas also skewed to the hard right, while wealthy parts of Germany favoured Mr Merz's Christian Democrats.

In the 50 seats with the fewest foreign residents – almost all in Germany's former east – the AfD surged ahead with more than a third of the vote. In the 50 most diverse seats, by contrast, the AfD was fourth behind the Christian Democrats, Social Democrats and Greens.

Shunned by mainstream parties as an extremist echo of the Nazis, the AfD was enthusiastically backed by Elon Musk and has been linked to disinformation campaigns on social media. One AI company, Cyabra, estimated on Monday that 1,000 fake accounts drove pro-AfD narratives during the campaign.

AfD leader Alice Weidel said Mr Merz would be an “interim chancellor” unable to meet his pledges on immigration if he worked with left-wing parties instead of the far right. “That’s exactly what people didn’t vote for,” she said. “The whole thing will resoundingly fail.”

A downbeat Mr Scholz remains in office until a new government is formed but signalled he would not seek a role in a new coalition. “I ran for the office of chancellor and not for any other role in the government,” he said. He warned, though, that his party “will not break European law” in any deal on migration.

Bavarian leader Markus Soeder, a key conservative power-broker, said there were encouraging early signs from the Social Democrats that a coalition could be agreed. He called for a deal that "leads Germany back to normality" and boosts its economic performance.

Immigration was a prime concern for German voters in an election campaign punctuated by violent incidents involving asylum seekers. AP
Immigration was a prime concern for German voters in an election campaign punctuated by violent incidents involving asylum seekers. AP

Timo Lochocki, a visiting fellow at the European Council on Foreign Relations, believes there's a good chance of Mr Merz's conservatives making concessions on social affairs and finance if they can “get most of their demands met” on immigration. “Striking a deal with the Greens on migration would have been way more complicated, while it's probably way more simple with the SPD,” he said.

Vice Chancellor Robert Habeck, whose Greens escaped with relatively mild losses, said there was “no time to waste” as Mr Trump seeks a deal with Moscow regarding the Ukraine war and shakes up the European postwar order. “This is a historic situation that we’ve never had before,” he said.

Germany's man to face Trump

Mr Merz, 69, is asking the caretaker Scholz government to consult him on foreign policy issues as Europe responds to crumbling US support for Ukraine and Nato. EU commission president Ursula von der Leyen said on Monday that “Europe's destiny” was at stake as Kyiv marked three years since the Russian invasion.

British Prime Minister Keir Starmer was one of the world leaders to congratulate Mr Merz on his victory as he prepares for high-stakes talks at the White House on Thursday. Mr Merz said his hope was that a new German government could be formed by Easter, which falls late this year on April 20.

“The world will not wait for us,” Mr Merz said. “Europe is waiting for Germany to be ready once again to take on a stronger leadership role.”

Defeat by Merkel

A private pilot and millionaire former lawyer, Mr Merz was exiled from politics in the early 2000s after losing a power struggle with Angela Merkel, who went on to rule Germany for 16 years. After losing party elections in 2018 and 2021 he won at the third attempt to become leader of the Christian Democrats in 2022.

Friedrich Merz is asking outgoing German leader Olaf Scholz to consult him on foreign policy as Europe navigates a Donald Trump-induced crisis. Reuters
Friedrich Merz is asking outgoing German leader Olaf Scholz to consult him on foreign policy as Europe navigates a Donald Trump-induced crisis. Reuters

A former chairman of a pro-American lobby group called Atlantic Bridge, Mr Merz has described himself as both a committed European and trans-Atlanticist but now faces the task of leading Germany through a rupture in the western alliance. As opposition leader he criticised Mr Scholz for hesitating to send arms to Ukraine and suggested talks with Britain and France on sharing nuclear deterrence.

The AfD had called for the lifting of sanctions on Russia but Mr Merz said its proposals would make Germany a “vassal state of Moscow”. The left-populist Sahra Wagenknecht Alliance, which narrowly missed the five per cent threshold, had likewise called for overtures to Russia.

The liberal Free Democrats, who were part of Mr Scholz's government until November, also missed the five per cent cut and will not be represented in the new parliament. Party leader Christian Lindner announced he would quit politics.

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Will the pound fall to parity with the dollar?

The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.

Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.

New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.

“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.

The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.

The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.

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Updated: February 24, 2025, 1:44 PM