Reforming Germany’s fiscal rules will be challenging

Significance Friedrich Merz, leader of the Christian Democratic Union (CDU) and favourite to become the next chancellor, indicated that he would change his party’s official stance and support reforms under certain circumstances. Impacts Merz’s hardening stance on immigration and border security could cost his party some support among centrist voters. The next government should be more stable and consistent than the last one, which will reassure foreign investors. If led by the CDU, the next government will adopt a much more business-friendly approach to climate and environmental policy.