Walking through the government district on a weekday afternoon is the best way to get a feel of the current atmosphere in Berlin. Moving between ministries, civil servants have the somewhat tense looks of those who are aware that the headlines are unpleasant. Outside the Bundestag, journalists gathered with their cameras aimed in directions that would have yielded different photos a year ago.
Twelve months into his chancellorship, Friedrich Merz was supposed to have already made a difference. The economy has not cooperated. There has been no cooperation from the coalition. Additionally, the timeframe he continues to present is becoming less and less credible to the public.
| Topic Snapshot | Details |
|---|---|
| Subject | Chancellor Friedrich Merz’s first year leading the German government |
| Office | Chancellor of Germany |
| Party | Christian Democratic Union (CDU) |
| Coalition Partners | SPD and select smaller parties |
| Term Started | Following the 2025 federal elections |
| Core Strategy | “Shock therapy” deregulation, tax reform, energy policy overhaul |
| Notable Reform Push | Easing the EU’s 2035 combustion engine ban |
| Current Approval Ratings | Persistently low, eroded by sluggish results |
| Major Political Challenger | Rising influence of the Alternative for Germany (AfD) |
| Foreign Policy Strain | Stalled Franco-German engine despite Merz’s pro-Europe rhetoric |
| Public Branding | Promised “autumn of reforms” in 2025 to revive Europe’s largest economy |
Even by German standards, his pledge was audacious when he assumed office in the spring of 2025. shock treatment. Reduce bureaucracy. reduced taxes. Resolve the energy crisis that was only partially addressed by the previous administration. Restore Germany’s standing as the industrial powerhouse of Europe, producing the machinery, automobiles, and chemicals that the rest of the continent depends on.
By the end of his first year, Merz promised that the term “sick man of Europe,” which had been adopted by The Economist and others to characterize the German economy under Olaf Scholz, would no longer be applicable. The verdict is harsh by that standard.
The level of industrial production has remained unchanged. Chinese rivals with quicker and more affordable electric cars continue to steal market share from the nation’s automakers. The largest automobile manufacturing in Europe, Volkswagen’s Wolfsburg facility, has once again cut shifts. Parts of BASF’s chemical production have continued to be moved to less expensive jurisdictions.
Despite Merz’s good intentions, his changes have not progressed as quickly as anticipated, and the signals emanating from Germany’s industrial heartland are unsettling. The speed, according to some, is “a trickle.” Frustrated by what they see to be lost chances during the first half of his term, his own ministers have begun advocating for quicker execution in private.
The clash between combustion engines has become iconic. Merz has put a lot of pressure on the EU to relax or postpone the 2035 ban on new gasoline and diesel cars, claiming that the timetable is unreasonable for a sector already under pressure from Chinese rivals. The argument is valid, especially for German automakers whose current capital investments, employment, and supply chains are dependent on internal combustion.
However, European partners have also harshly criticized it, viewing the action as a retreat from climate obligations. The stance encapsulates Merz’s more general challenge. He’s attempting to perform two things at once. Preserve the current state of German industry. and update it for a time when that industry might not even be necessary.
It’s even more difficult politically. His government’s approval ratings have remained steadfastly low. In regional surveys, the AfD has kept rising, especially in eastern states where concerns about immigration and deindustrialization feed off one another. Merz has discovered that this position works better in CDU conferences than in the general electorate. Merz built his name on a more combative, pro-business form of conservatism than Angela Merkel ever delivered. Speaking with political analysts in Berlin, it seems that the nation’s center-right voter base is patient but not unconditionally so.
Merz had vowed to reinvigorate the Franco-German axis, but this has not happened. Technically, relations with Paris are friendly. Significantly, they have not created many of the cooperative projects that European observers had anticipated. The two nations still disagree on industry subsidies, EU defense spending, and fiscal policy. After a whole year, the “restart” Merz mentioned during his inauguration appears to be more of an idle engine than a potent one. Critics in Europe have referred to his approach as “inefficient.” German diplomats resist, yet it is difficult to overlook the discrepancy between words and deeds.
The historical echo is difficult to ignore. Germany was similarly labeled as Europe’s underachiever by Gerhard Schröder, the SPD chancellor of the early 2000s. The country’s strongest growth period in decades is said to have begun as a result of his politically unpleasant response, the Hartz reforms. Although the circumstances are different, Merz seems to be aiming for a similar moment.
Schröder’s reforms were driven by an export-led economic model that relied on an opening, globalized world. Merz inherits a fractured world. The formula that worked twenty years ago is complicated by supply chain reorganization, trade conflicts with China and the US, and the gradual decline of Germany’s conventional industrial advantage.
Whether the long-promised “autumn of reforms” truly materializes with substance will determine what happens next. The plan includes pension restructuring, welfare modifications, tax reform, and a significant push on energy infrastructure. Merz has publicly discussed a “epochal shift” in the world order that calls for Berlin to have equal aspirations.
It is genuinely doubtful if his coalition has the unity and his civil service has the speed to deliver. Listening to his recent statements gives me the impression that he is aware that the opportunity is closing. There isn’t much political room for another postponement due to pressure from the AfD on the one hand and disgruntled business leaders on the other.
No matter who is in charge, Germany’s industrial future will not be decided in a single year. However, Merz’s first year has demonstrated just how difficult the climb is. It was always risky to use shock therapy. After a year, the patient remains on the table, the diagnosis is disputed, and the doctor is running out of time to demonstrate that his medication is effective.