Friedrich Merz thinks he is the savior of the old German establishment. He is really more of a gravedigger

German chancellor Friedrich Merz has made a moderate media splash and ruffled some feathers in his own ruling coalition with the Centrist Social Democrats (SPD). Using the platform of a regional party congress of his CDU Conservatives in Niedersachsen, Merz has delivered a speech that immediately attracted national attention and will be remembered for one phrase.

“The social [welfare] state, as we have it today,” the chancellor declared with appropriately dour mien, “can no longer be financed by what we are achieving economically.” Put differently, severe budget cuts on social issues are coming. And since that is a policy operative since, at the latest, 2003, there really isn’t so much left to cut. Merz is promising his people more of a bad time.

His people. Not, however, the ultra-corrupt political anti-elite of Ukraine. Just before Merz’s claim that Germany cannot afford what it used to offer to Germans who pay for it, his government promised €9 billion ($10.4 bn) per year for Ukraine in 2025 and 2026 , for now. That is on top of the €44 billion already sent that way. Germany is the “ second-largest backer ” of the Kiev regime in the world, as its obviously thoroughly detached finance minister Lars Klingbeil emphasizes with a perverse pride that must sound like a bad joke to many of his compatriots.

Speaking of Klingbeil, in his Niedersachsen speech Merz also announced that he would “deliberately not make it easy” for his government colleagues from the SPD, who include, of course, Klingbeil. The SPD, of course, is well-known for being against harsh reductions in what Germans can expect from, in essence, old-age pensions, public health care, and the basic form of unemployment insurance now known as “Bürgergeld” (literally, “citizens’ money” ).

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There is no reason to underestimate Merz’s genuine ideological commitment. It is true that, in general, he is unusually brutal about being dishonest even for a politician: Germany’s current leader has already proven that he is capable of breathtaking flipflops, staggering electoral bad faith, and underhanded maneuvering that violates the spirit of democracy if not the letter of the constitution.

In the spring, his U-turn on public debt , to finance Germany’s new militarism on – exuberant – credit, was not only a massive breach of trust regarding especially his own conservative voters. Shamelessly exploiting a legal loophole, Merz also executed this radical reversal – many in his own party called it betrayal – by relying on parliamentary majorities that had already been cancelled by an election.

Likewise, Merz’s coalition then proceeded to break promises regarding an energy tax relief as well as benefits for mothers. Germans are angry, but there is no sign that Merz and his government care. Consequently, according to a fresh poll by the reputable INSA institute, 62 percent of Germans are dissatisfied with their government.

And yet, there is a hard core of authentic Merz, shaped by his own wealth , a very privileged life without material worries, and his long career as an overpaid member of the supervisory-board network nobility, at BlackRock and elsewhere: if there is one thing Germany’s leader is sincere about, it is his iron will to make the less well-off bleed more and work even harder, while making sure that those as materially comfortable and safe as himself get even richer. Call it neoliberalism with an unsmiling German face.

Merz, of course, is also a very ordinary man, incapable of much self-reflection. He cannot honestly face any of the above. Instead he misunderstands himself as a savior of the fatherland, which he sees in need of much tough love and plenty of wholesome kicks up the backside to rediscover discipline, hard work, and competitiveness.

The upshot of Merz’s blatant upper-class bias is, as a perspicacious German observer has put it , a de facto escalation of the ongoing re-distribution of income, wealth, and life chances – from those below to those above. Even now, 80 percent of the country’s taxes stem from income and value-added taxation. In other words: you work, you eat and keep a family going – be proud, you are also doing by far the most to pay the country’s bills. But Friedrich Merz, a millionaire who falls under “silver-spoon” rather than “self-made,” thinks it’s not yet enough.

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No wonder, then, that Merz’s recent speech in Niedersachsen has resonated. It was delivered in a sour as well as emphatic tone perhaps best described as schoolmasterly belligerence and featured much gratuitous no-compromise posing addressed probably more to his own doubting party and voters then his SPD coalition partners in Berlin. If Merz’s intention was to achieve a minor shock effect after Germany’s political summer break, he’s scored an ephemeral success.

But his speech has also been misunderstood. In reality, its key message was something else and even worse. Yet another “business-friendly” – and business has also been very friendly to him – instinctive Western austeritarian telling his people they are having it too good and must lower their expectations? Not really news, is it?

What was much more interesting was Merz’s reasoning. In his own words, the central political challenge is to prove that Germany “can be governed successfully from the center .” Or to be concrete, to keep down and out of power Germany’s two “populist” insurgent parties: from the right the very successful Alternative for Germany party (AfD), which tends to lead German opinion polls now , and, from the left, the currently marginalized – probably by foul play in the manner of, say, Romania or Moldova – but still threatening Bündnis Sarah Wagenknecht (BSW).

Merz’s threat to go after what is left of the social welfare state in Germany comes with a promise of “reforms,” indeed a whole “autumn of reforms.” The purpose of this planned political offensive is clear: to persuade voters that they need not rely on those terrible “populists” to finally break out of the German doom loop of economic decline, demographic crisis, and pervasive malaise.

Yet Merz’s strategy of what Germans call a “Befreiungsschlag” (a “deliverance strike” ) smells of despair and is unlikely to succeed. Instead of an “autumn of reforms,” Germans are more likely to see their Winter of Discontent get even grimmer.

Consider some basic data: We have just learned that Germany’s recession in the last quarter has been even worse than predicted: -0.3 instead of -0.1 percent. German industry is shedding jobs by the hundreds of thousands . In general, Germany’s economy remains heavily dependent on exports. It has stagnated for half a decade already and been in serious trouble much longer. In the EU+Britain, it is the most brutally affected by Trump’s ongoing and still escalating tariff war against Washington's vassals. Klingbeil admits that the budget will be €170 billion short by 2029 – despite dialing debt up to eleven.

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And all of that when the German ruling coalition only has what the Financial Times rightly calls a “ razor-thin ” parliamentary majority. Add that two of the most damaging strikes against the German economy have been self-inflicted: Sky-high energy prices, the direct result of shutting Germany off from (direct) Russian supplies – with the alleged help of a few Ukrainian divers and their US friends, of course – and subservience to the US.

That subservience has only grown worse under both Merz and his equally hapless predecessor Olaf Scholz. Both have been bending over backward to please and appease America, just when its policies have become even more brutal: We are at a moment in “atlanticism” when a US treasury secretary openly announces that Washington sees its allies’ economies as its very own “sovereign wealth fund” at the disposal not of their governments or – perish the thought – citizens, but of the US president. And Merz and co. grin and nod and ask for more.

The irony of it all is that while slavishly compliant with the US, Merz cannot learn the single biggest, most obvious lesson of its very recent political history, although it quite literally stares him in the face every time he visits the Oval Office to grovel: Donald Trump has become president against enormous resistance not once but twice because he led a “populist” challenge against a rotten establishment that Americans saw as unpatriotic.

The future of Merz is not the success of Trump but the defeat and disgrace of Biden and everything he stood for. Germans, too, will demand a government that looks after German interests before it makes even more demands of them. Grotesquely, Merz thinks he is the savior of the old German establishment. He is its gravedigger. And in that sense, all power to his misguided arm!

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