Janice R. Andrews
Friedrich Merz, the towering figure of the Christian Democratic Union (CDU) and a potential candidate for Germany’s next chancellor, is under fire for his controversial economic policies. Critics argue that Merz is chiseling economic decline into the German constitution, with plans to push the country into a historic debt spree. This move, which contradicts his earlier stance as a fiscal conservative, has sparked outrage among economists, constitutional experts, and the public alike.
Merz’s Political Flip-Flops Raise Eyebrows
Once hailed as the “last line of defence against debt madness,” Merz has now embraced a policy that could see Germany’s national debt soar into the trillions. This dramatic U-turn comes after the CDU’s coalition negotiations with the Social Democrats (SPD), who suffered their worst election result since the 19th century. Despite this, Merz has agreed to a debt-fueled spending spree that critics say will have long-term consequences for Germany’s economy.
The proposed debt plans, misleadingly labeled as Sondervermögen (special assets), are equivalent to roughly 20% of Germany’s gross national product (GNP). This would increase the country’s debt ratio from 65% to 85%, violating the Maastricht Treaty’s debt criteria and potentially triggering a downgrade of Germany’s credit rating. The move has been described as a blatant disregard for fiscal responsibility and a betrayal of the CDU’s pre-election promises.
Constitutional Concerns and Democratic Legitimacy
One of the most contentious aspects of Merz’s plan is the attempt to push through far-reaching constitutional amendments using the outgoing Bundestag. Critics argue that this undermines democratic legitimacy, as the newly elected parliament would not support such measures. Constitutional lawyer Dietrich Murswiek has condemned the move, stating that it shows “contempt for the will of the voters” and “disregard for the democratic legitimisation process.”
The outgoing parliament’s decision to delay the constituent session of the new Bundestag has further fueled suspicions. Many see this as a deliberate attempt to bypass the newly elected representatives and impose a fait accompli on future generations. Murswiek warned that such actions erode trust in democratic institutions and set a dangerous precedent for constitutional changes.
Economic Fallout: A Looming Crisis
The proposed debt spree is expected to have severe economic repercussions. By increasing the money supply and crowding out private investment, the plan could stifle economic growth and productivity. While short-term stimulus measures may provide a temporary boost, the long-term effects are likely to be detrimental. Rising capital market interest rates and increased government spending could lead to a new European sovereign debt and banking crisis, with Germany at its epicenter.
Defence spending, a key component of the proposed budget, is particularly controversial. Unlike infrastructure investments, defence acquisitions such as tanks do not generate future economic returns. Critics argue that the government’s inefficient procurement system will result in significant waste, with the real purchasing power of the €500 billion program estimated to be closer to €200 billion. This inefficiency, combined with limited supply capacity, is expected to drive up prices and further strain the economy.
Merz’s Foreign Policy Missteps
Merz’s economic policies are not the only source of concern. His recent comments on foreign policy have drawn criticism for their lack of nuance and understanding. During the Munich Security Conference, Merz clashed with US Vice President JD Vance, accusing him of an “overbearing approach” towards Europeans. This response, while seemingly confident, highlighted Germany’s diminished role on the global stage. As a self-proclaimed transatlanticist, Merz’s inability to navigate diplomatic relations effectively raises questions about his suitability for leadership.
Similarly, Merz’s dismissal of Argentinian President Javier Milei’s economic policies has been met with skepticism. Despite Milei’s success in turning around Argentina’s economy, Merz dismissed his approach as detrimental to the state and its people. This lack of awareness and willingness to engage with alternative economic models further underscores Merz’s ideological rigidity.
A Road to Serfdom?
Friedrich Merz’s debt plans have been likened to leading Germany down the “road to serfdom,” a term coined by economist Friedrich Hayek to describe the dangers of excessive government control. By binding future generations to unsustainable debt, Merz risks undermining Germany’s economic stability and global standing. The proposed constitutional amendments, if enacted, would lock the country into a cycle of debt and dependency, with little room for maneuver.
The CDU’s willingness to collaborate with the Greens on climate protection projects adds another layer of complexity. While environmental initiatives are crucial, the allocation of hundreds of billions of euros to pet projects without clear economic returns raises concerns about fiscal responsibility. Critics argue that Merz’s approach prioritizes short-term political gains over long-term economic health.
Conclusion: A Historic Failure in the Making
Friedrich Merz’s tenure as a potential chancellor is shaping up to be a historic failure. His rapid shifts in policy, lack of diplomatic finesse, and disregard for democratic principles have eroded public trust. The proposed debt spree, if implemented, could accelerate Germany’s economic decline and trigger a broader European crisis. As the country stands at a crossroads, the need for principled leadership has never been greater. Merz’s actions, however, suggest that he is more interested in political opportunism than in securing Germany’s future.
In the coming months, the debate over Merz’s debt plans will likely intensify. With constitutional challenges and public opposition mounting, the CDU leader faces an uphill battle to justify his policies. One thing is clear: Germany’s economic future hangs in the balance, and the decisions made today will have far-reaching consequences for generations to come.
