German elections: the centre barely holds

The outcome of this Sunday’s election narrowed the range of potential coalition s down to a single option : a CDU/CSU – SPD government with CDU chairman Merz as the next chancellor. Coalition talks are likely to be difficult but the surge in the far-right AfD as well as the escalation of tensions with the US government and the dismal economic situation will help to focus the minds of both sides. Given these internal and external pressures , w e see a chance for some meaningful reform steps and higher government spending on defense and infrastructure. But this is not a given and there are clearly a few potentia l potholes on the way to forming a new government.