THERE HAVE been sweeter victories. As expected, Friedrich Merz’s opposition Christian Democrats (cdu) won Germany’s federal election on February 23rd, in tandem with their Bavarian sister party, the Christian Social Union (csu). But the conservative parties’ result of just 28.6%—their second-worst in the history of the republic—muted celebrations at Konrad Adenauer House, the cdu’s Berlin headquarters. With the outgoing government led by Olaf Scholz regularly plumbing new depths of unpopularity, many in Mr Merz’s ranks had hoped for far better. The wound was deepened by the capture of close to a quarter of the seats in the Bundestag by the hard-right Alternative for Germany (afd), a party harbouring extremists that was the night’s big winner. The afd now dominates Germany’s east, and made big gains in the west, too.

Relief came in the form of the failure of two smaller parties, the Free Democrats and the Sahra Wagenknecht Alliance, to meet the 5% threshold needed to enter parliament. That meant more seats for the bigger parties, enabling Mr Merz to form a coalition with Mr Scholz’s Social Democrats (spd) alone rather than seek two partners. Talks should begin next week.

Mr Merz and his confidants will lead their early phase, though regional cdu barons will want a say. The spd’s pointman will be its co-chief, Lars Klingbeil. He has quickly cemented his grip on the party, this week adding leadership of its shrunken group of mps to his portfolio. A wily 47-year-old centrist who has helped negotiate coalition deals before, Mr Klingbeil is also said to be eyeing the vice-chancellorship. (Mr Scholz will remain in office until Mr Merz takes his place, but the outgoing chancellor will play no part in the talks.)

That Mr Merz has no alternative partner—his party, like all others, shuns the afd—hands the spd leverage in the talks to come. The cdu/csu is unlikely to win much backing for most of the unfunded tax cuts it has proposed; for its part the spd may have to give ground on Bürgergeld, a welfare payment which Mr Merz thinks coddles the workshy. The parties differ on investment, energy, the minimum wage and some weapons deliveries to Ukraine. There will be squabbles over how to divvy up the big ministries, especially finance, and the parties must also draw up a budget for the rest of 2025. But none of these hurdles looks insurmountable.

On migration, a trickier area, Mr Merz may have to break his rash vow before the election not to compromise on proposals that plainly violate German and European law, such as rejecting asylum-seekers at the border. New eu asylum rules due to take effect next year may offer a face-saving way out. More broadly, if Mr Merz gets his wish for a skimpy coalition agreement in place of the door-stoppers of recent years, he may manage to wrap up talks by Easter.

Meanwhile, a more pressing demand has emerged. A third smaller party, the socialist Die Linke (The Left), which months ago looked close to extinction, enjoyed a late surge to win 8.8% of the vote. This was powered largely by young voters in western cities angered by Mr Merz’s decision to vote with the afd on immigration, alienated by the centrism of the spd and Greens, and open to Die Linke’s bread-and-butter campaign on housing and wages.

Die Linke’s success means that it, along with the afd, will hold just over a third of the seats in the next Bundestag, which convenes in late March. That threatens any plans that the cdu/csu, spd and the Greens might have to push through constitutional changes, which require two-thirds majorities. Crucially, that includes amending Germany’s increasingly obsolete debt brake, which limits the federal government’s structural deficit to 0.35% of gdp.

The easiest way to secure backing for debt above these levels from Mr Merz’s fiscally hawkish ranks will be to devote it to defence spending, especially since America’s underwriting of European security now looks distinctly shaky. Germany needs at least €30bn ($31bn) a year from 2028 simply to meet the nato floor of 2% of gdp. But while Die Linke detests the debt brake, it holds military spending in equal disdain. “They will need to negotiate with us if they want to reform it, and I will not make that cheap, I can tell you,” warns Ines Schwerdtner, its co-leader.

That has driven Mr Merz to consider an unorthodox alternative: recalling the outgoing Bundestag, in which the three mainstream parties hold 71% of the seats, to push through a debt-brake-circumventing special fund for defence, reportedly worth €200bn-250bn. The parliament remains in place until the next one is convened, so the manoeuvre seems legally sound if politically dubious. “To be called back for an emergency session would be bizarre,” says Jens Zimmermann, one of 87 spd mps who lost their seats. “The question is how much this would damage democracy.”

Thus has Germany’s lame-duck period, usually defined by cautious shadow-boxing, become an occasion for high-stakes intrigue. Having first proposed using the old parliament themselves, the Greens are raising their price, calling for a debt-brake reform to enable investment in infrastructure, schools and climate policy as well as defence. The spd is mulling its position.

Perhaps the spd and Greens could back the special fund now in exchange for a cdu/csu commitment to loosen the debt brake in a fashion that could pass muster with Die Linke later. But such machinations risk getting bogged down in politics just when Germany has to show its European partners it has a credible path to rearmament and a response to Donald Trump, says Moritz Schularick, head of the Kiel Institute, a research outfit. Either way, momentous decisions may come within weeks: lightning speed for a democracy that usually moves at a snail’s pace. As Mr Merz said on election night: “The world will not wait for us.” He has already raised eyebrows by calling for Europe to “achieve independence” from America.

A deeper question is whether Germany’s next parties of government are convincing agents of change. The cdu/csu and the spd have become clubs for the elderly; had the election been confined to voters under 60 they would not have commanded a majority. Neither party has had much to say about reforming Germany’s public pensions, now gobbling up 23% of the federal budget; rebalancing the flatlining economy away from exports towards domestic consumption; or getting a grip on Germany’s woeful record on digitalisation. Germans have known considerable upheaval in the past few years, much of it redounding to the benefit of the afd. Is Mr Merz ready to deliver more? ■

To stay on top of the biggest European stories, sign up to Café Europa, our weekly subscriber-only newsletter.