The 2025 federal election in Germany was highly anticipated, as individuals and governing bodies around the world recognized the potential implications of the outcome. BAL shared a synopsis of the election outcome in our 2025 Global Election Hub, but the following provides more context around how Germany’s government is structured, why this election was crucial and how the results might play out in the next several years.

How Germany’s government is structured 

Germany’s constitution (The Basic Law) established the country as a constitutional federal state system and parliamentary democracy. The parliamentary system incorporates many features of the British system, but unlike the U.K.’s unitary nature, the federal component incorporates elements of a political structure found in the United States and other federal governments. Parliaments belong to the legislative branch, while governments belong to the executive branch and the judicial branch holds a key independent role.

The federal president is the head of state of the Federal Republic of Germany. The formal chief of state is chosen for a five-year term by a specially convened assembly and is the highest-ranking representative of Germany in terms of protocol. The president represents the country in its dealings with other countries and appoints government members, judges and high-ranking civil servants.

The president nominates the federal chancellor, who is then elected by a majority vote and is vested with the greatest political decision-making power. The president sets guidelines for policy and possesses power comparable to the president in a presidential democracy.

The Bundestag is the lower chamber of the federal parliament, made up of elected representatives of the German people. It is the cornerstone of the German system and has 630 members, although the precise number varies depending on the next elections. National elections to the Bundestag are held once every four years. The 69-member upper chamber, known as the Bundesrat, has members who are appointed by the state governments. The body exercises its authority to protect the rights and prerogatives of the state governments.

Under rules designed to prevent the instability that facilitated the rise of fascism in the 1930s, the president can only dissolve parliament and call an election if the federal chancellor calls, and loses, a confidence vote (more on that later).

Why the 2025 election was highly anticipated 

Before the most recent election, the chancellor was Olaf Scholz of the Social Democratic Party (SDP). He succeeded Angela Merkel in December 2021 and was elected after the SDP entered into a coalition agreement with two other political parties known as the Alliance ’90/The Greens (Bündnis ’90/Die Grünen) and the Free Democratic Party (FDP).

This three-party “traffic-light” coalition government, ruling Germany since 2021, collapsed in November 2024 after Chancellor Scholz called for a confidence vote in parliament. On Dec. 16, 2024, he lost the vote of confidence, and the German parliament accepted the chancellor’s invitation to withdraw its confidence in him and dissolve the lower house of parliament. The no-confidence vote resulted in the need for an early election on Feb. 23, 2025, to elect the 21st Bundestag, rather than in September 2025 as originally scheduled. The snap federal election has tremendous implications for the EU’s largest member state and biggest eurozone economy.

The center-right Friedrich Merz of the Christian Democratic Union (CDU) was the front-runner to replace Scholz heading into the election. The CDU and Christian Social Union (CSU) had been ahead in the polls for months.

Germany’s party-political system has become more fragmented in recent years, with more parties and more radical upstart political forces. The far-right Alternative für Deutschland (AfD) entered the Bundestag for the first time in 2017, winning 12.6% of the vote. Before the election, it was polling around 20%. Scholz’s SDP and The Greens were two of the other major political players (third and fourth, respectively).

How the election panned out 

Germany is getting a new chancellor, with Merz on course to become Germany’s 10th chancellor. The CDU/CSU secured 208 seats (28.52%), while the AfD and its leader, Alice Weidel, secured 152 seats (20.8%) and Scholz’s SDP secured 120 seats (16.41%). Scholz will continue as a caretaker chancellor until Merz is sworn in. It should be noted that AfD doubled its vote share from four years ago in the strongest showing for a far-right party since World War II.

What happens now? 

The election determined who would be elected to parliament. Now, Merz must put together a coalition government. Only when a coalition deal has been reached will the 630 lawmakers in the new Bundestag vote to elect the next chancellor, who must secure at least 316 votes. There are no formal deadlines for coalition-building or voting on the new chancellor. Merz has said he wants to begin talks immediately and hopes to form a governing coalition by Easter.

The now-outgoing government of Chancellor Scholz is the most unpopular since 1949. Germany, which has 83 million inhabitants, grew into the world’s third largest economy primarily by making and exporting engineering products. It is considered an export-reliant and manufacturing-heavy economic model. Overall, real GDP is expected to have contracted by 0.1% in 2024, following a decline of 0.3% in 2023, the second year in a row with negative growth.

The next chancellor will have to tackle an economy that has shrunk for two consecutive years for the first time in decades — in part because of a slowdown with trade partner China, high energy costs and growing international competition.

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This alert has been provided by the BAL Global Practice Group.

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