Germany’s Geopolitical Shift Under Merz
The chancellor’s cautious effort to strengthen defense and reduce dependence under rising political and economic pressure
One year ago, German voters put Friedrich Merz on the path to the chancellorship. The immediate narrative was simple: the far-right Alternative for Germany (AfD) had surged, and Merz was promising to restore direction after a period of economic drift and political fatigue.
Both points were true, but they were not the whole story.
The February 2025 election and the shaky coalition-building that followed reflected a public mood that was less ideological than corrective. Voters were responding to stagnation, migration pressures, and the sense that Germany’s political center had lost its grip on events.
At the time, the key question was not whether Merz would transform Germany overnight. It was whether his methodical, boardroom style of leadership could gradually reposition Germany for a harsher strategic environment—one in which Russia remained aggressive, American politics had become mercurial, and crises from Eastern Europe to the Middle East were beginning to collide with Germany’s economic vulnerabilities.
By early 2026, Merz was making that argument explicitly. At the Munich Security Conference, he called for a stronger, more sovereign Europe focused on freedom, security, and competitiveness, while still framing that effort inside the broader transatlantic relationship. That was not a declaration of rupture with Washington. It was a muted warning that Europe needed greater capacity to act amid strategic uncertainty.
His government has expanded Germany’s post-2022 defense buildup, increasing military spending, accelerating procurement programs that had long stalled inside the military, and emphasizing air defense, ammunition production, logistics, and heavy land forces designed for a prolonged conflict on the European continent. The objective is not simply to repair Germany’s military after decades of underinvestment, but to position Berlin as a central pillar of European defense rather than a beneficiary of American protection.
That shift matters most on Russia and Ukraine, where Merz’s position has been clearer and steadier than Trump’s. After his Washington meeting in early March 2026, Merz said openly that he had urged Trump to put more pressure on Vladimir Putin, arguing that Moscow was stalling and that only renewed pressure from Washington would produce concessions. He also insisted that Europe had to be more closely involved in negotiations and that only a peace supported by Europe could last.
Greenland exposed the same balancing instinct. When Trump renewed pressure on Greenland, Merz did not dismiss the issue as noise. At the World Economic Forum in Davos in January 2026, he said Denmark and the people of Greenland could count on Germany’s solidarity and tied that solidarity to the defense of sovereignty and territorial integrity. Later that month, the prime ministers of Denmark and Greenland met him in Berlin as European capitals tried to coordinate support in response to Trump’s push.
The war with Iran has now added another layer of strain to that balancing act. Germany did not participate in the U.S. and Israeli strikes, and Merz initially joined the leaders of France and the United Kingdom in urging restraint and a return to negotiations. He has voiced concern that the conflict lacks a clear strategy for bringing it to a swift conclusion.
The issue has nonetheless exposed a visible fault line inside his coalition. Leaders of the center-left Social Democratic Party (SPD)—part of Merz’s ruling coalition—have taken a markedly more critical tone. Vice Chancellor Lars Klingbeil has argued that the strikes violate international law and warned that “this is not our war.” Public opinion has largely leaned in that direction. Surveys suggest most Germans oppose the strikes—a reminder that Merz’s attempt to move Germany toward a more assertive strategic role is unfolding in a country whose political center remains deeply cautious about military escalation abroad.
Merz has handled these pressures cautiously. In Washington he avoided a public clash with Trump even as the president attacked Spain and Britain and offered little visible movement on tariffs or Ukraine. Merz’s approach has been to absorb the public theater and insist that the real defense of allied interests takes place in private. The logic is straightforward: avoid rupturing the alliance in public, preserve room for persuasion behind closed doors, and keep Germany aligned with the United States while quietly preparing for the possibility that Washington may be less predictable than it once was.
That recalibration is visible—but so are the political limits pressing in on it. Merz governs in a less forgiving environment than the one he inherited. The AfD is no longer just a protest vessel; it is consolidating support in working-class and industrial regions where economic anxiety is most acute. Recent regional election setbacks for the governing parties have reinforced how fragile Germany’s political center remains. Even where the coalition of conservatives and the SPD has stabilized, it has not restored a commanding political majority capable of absorbing the political costs of the strategic shift Merz is trying to impose.
China exposes the hardest constraint on Merz’s strategic repositioning. On his first trip to Beijing as chancellor in February 2026, he tried to thread a narrow line: preserve the economic relationship while speaking more bluntly about its terms. Merz raised Germany’s widening trade deficit, Chinese restrictions on German firms, industrial overcapacity, and the distortions created by subsidies and export practices, while also discussing the need to de-risk supply chains tied to rare earths and other critical inputs. The visit underscored a shift in how Berlin now views China—not simply as a market, but as a competitor, a dependency risk, and a strategic challenge.
Yet acknowledging that shift is easier than acting on it. Germany’s industrial model remains deeply tied to Chinese markets and supply chains. Officials and business leaders increasingly warn about deindustrialization pressures, widening trade imbalances, and vulnerability in critical minerals. But large German firms still depend on China for profits, scale, and technological collaboration. The result is that Merz’s government has begun to redefine the problem without yet resolving it.
Germany’s strategic shift will ultimately be tested not in speeches or defense budgets but in how these pressures converge. The first test will come from Germany’s own politics. If economic stagnation deepens or industrial restructuring accelerates, the AfD’s growing strength in working-class regions could narrow the room for the strategic adjustments Merz is trying to make.
A second test will come from China. Germany’s leadership increasingly recognizes the risks of economic dependence, but recognition does not resolve the dilemma. If Chinese overcapacity continues to erode European industry or if geopolitical tensions begin to disrupt trade flows, Berlin will face a harder choice between economic stability and strategic resilience.
The third test will come from the transatlantic relationship itself. Merz’s strategy assumes that Germany can strengthen Europe while preserving alignment with Washington. That assumption becomes harder to sustain if American policy grows more erratic or if the United States presses allies into choices between economic partners and security commitments.
Merz’s first year has therefore clarified the direction of Germany’s strategy but not yet its durability. The coming years will show whether Berlin can gradually build the political and economic foundation needed for a larger strategic role—or whether the pressures gathering around Germany’s economy and politics will force a more hesitant course.