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Friedrich Merz, poised to become Germany’s next chancellor (prime minister), warns he is “very worried” the European Union (EU) is barreling toward another financial crisis, blaming excessive debt. “We can’t play fast and loose with public finances like some others do—and even those others are starting to alarm me,” said the nominally conservative politician of the Christian Democratic Union (CDU) formerly led by Angela Merkel.
Six EU nations—France, Italy, Greece, Belgium, Spain, and Portugal—carry debt loads exceeding their annual economic output. “A financial crisis is coming, no question,” Merz told POLITICO. “It’ll hit as a sovereign debt crisis. We can’t pinpoint the when or the where, but it’s on its way.”
Germany is just five days from a general election. Merz’s party is expected to win first place comfortably, with the right-populist Alternative for Germany (AfD) party in second, ahead of the governing Social Democrats and their current and former coalition partners in the Green and Free Democratic parties. However, Merz is far more likely to seek a so-called “grand coalition” with leftist parties than a stronger center-right coalition with the AfD, which is largely shut out of positions of influence by establishment consensus.
Merz’s warnings on a European debt crisis come as the U.S. presses the EU to shoulder more of its defense costs. Germany faces a steep climb to meet its NATO spending obligation of 2 percent GDP defense spending post-2027. Berlin pumped €100 billion into a special fund to revamp its military after Russia invaded Ukraine in 2022, but most of that cash is already spoken for—leaving a €30 billion annual gap.
“We need to sort out our priorities—first, how much room do we have to cut costs?” Merz mused, stressing, “Economic growth is the answer to everything. That’s my top focus before we dive into anything else.” Neither the Social Democrats nor the Greens agree, arguing Germany must instead loosen borrowing limits.
Migration splits the CDU and the left, too. Despite his party’s history of encouraging mass migration under Merkel, Merz promised to close Germany’s borders on day one. “We must slash the number of people flooding in, and fast,” Merz said, adding, “Other countries prove it’s doable, why not Germany?”—a possible reference to U.S. President Donald J. Trump.
Germany, Forsa poll:
CDU/CSU-EPP: 30%
AfD-ESN: 20%
SPD-S&D: 16%
GRÜNE-G/EFA: 13%
LINKE-LEFT: 7%
FDP-RE: 5%
BSW-NI: 4%+/- vs. 11-14 February 2025
Fieldwork: 11-17 February 2025
Sample size: 2,501— Europe Elects (@EuropeElects) February 18, 2025
Image by Steffen Prößdorf.
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Friedrich Merz, poised to become Germany’s next chancellor (prime minister), warns he is “very worried” the European Union (EU) is barreling toward another financial crisis, blaming excessive debt. “We can’t play fast and loose with public finances like some others do—and even those others are starting to alarm me,” said the nominally conservative politician of the Christian Democratic Union (CDU) formerly led by Angela Merkel.
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