Nicole Koenig

Head of Policy, Munich Security Conference

The EU faces a dual risk: German inaction and a resurgent so-called German question. Europe’s largest economy is indispensable to the bloc’s geopolitical ambitions, yet it increasingly struggles to convert its weight into strategic leadership.

High energy costs, Chinese competition, demographic decline, and years of underinvestment have weakened Germany’s industrial base, fueling fears of decline and far-right gains. Under such pressure, Berlin risks turning inward.

Simultaneously, it oscillates between assertiveness and hesitation. It plans to make its armed forces the strongest conventional army on the continent but is unsure about strengthening the EU’s geopolitical role.

Berlin advocates for a single market for defense while protecting domestic industry, calls for a more sovereign EU while opposing a bigger union budget and joint borrowing, and pushes for qualified majority voting in foreign policy while tiptoeing around the more fundamental reform debate.

Germany should move beyond the false dichotomy between domination and indecision. Given its own struggles, it needs to embrace coleadership with other major countries around three priorities: a joint roadmap to seize the burden from Washington, a coordinated push to catch up in the global artificial intelligence race, and a shared vision of the reforms—including budgetary ones—the EU needs to rise to the moment.

Paul Maurice

Secretary General of the Study Committee on Franco-German Relations, French Institute of International Relations (IFRI)

The problem is not simply that Germany is growing too slowly. Its industrial model, built on cheap Russian energy, export-driven manufacturing, and deep economic ties with China, has been badly shaken. Energy costs remain high, Chinese competition is intensifying, and Germany’s automotive giants are struggling to adapt to the electric transition. At the same time, political fragmentation at home is making strategic decisions harder to make.

For the EU, this matters because Germany’s weight has always translated into European leverage. When Berlin hesitates, Brussels often hesitates with it. On defense, industrial policy, energy, and relations with China, the gap between the scale of the geopolitical challenge and Europe’s ability to act is becoming harder to ignore.

The rise of the far-right Alternative for Germany (AfD) party adds a more sensitive dimension. Without necessarily implying a shift toward Russia, its growing influence is helping to reshape the debate over the war in Ukraine, sanctions, and the cost of supporting Kyiv. For Europe, the risk may be less a sudden turn than a gradual erosion of the strategic consensus toward Moscow—precisely when the EU needs to demonstrate its ability to act as a geopolitical power.

Katja Bego

Senior Research Fellow, Chatham House

Yes and no. The old adage, that when Germany sneezes the rest of Europe catches a cold, still holds. For the EU to be a credible geopolitical power, it needs a competitive, innovative economy and the industrial capacity to back it up. Berlin has not yet found a new model that ensures it can provide this into the future. Nor has it found an answer to the China question, which so fundamentally threatens its industrial base.  

Meanwhile, political instability distracts decisionmakers in Berlin from developing a vision for how to address the great geopolitical challenges that ail the continent. The fear of a still rather unlikely AfD takeover makes other member states hesitant about pooling sovereignty on the defense front.

It is, however, not fair to call this a Germany problem per se. Other key EU members find themselves in an even worse economic and political predicament. Nor should all the onus be on Berlin. In NATO, Europe has allowed itself to become entirely dependent on the United States for its security, leaving a dangerous single point of failure in the alliance’s design. A truly resilient geopolitical Europe, similarly, should not rise and fall on the fortunes of a single member state.

Liana Fix

Senior Fellow, Council on Foreign Relations

The EU does not yet have a Germany problem, but it might develop one in the future.

Berlin’s debt-financed rearmament is a huge opportunity for the continent. It means Germany is contributing far more to defense in absolute numbers than any other country.

However, it needs to become more European to prevent fears of German dominance and safeguard against the rise of the AfD. So far, Berlin is spending much of its money on defense companies at home while refusing to give a green light to joint European debt for defense. This means that Germany can rearm and reap the industrial benefits while precluding large-scale rearmament for other European countries who do not have the fiscal flexibility to follow Berlin’s spending drive. This, in turn, can raise concerns about German dominance in Europe.

At the same time, the inability of policymakers to contain the rise of the AfD reawakens old fears, especially in Poland.

There are two ways out of this problem. First, Germany has to allow the European Commission to use its tough instruments against China to prevent the decline of the German and European automotive industries, and second, it has to accept the necessity of European joint debt on defense.

Niklas Helwig

Leading Researcher, Finnish Institute of International Affairs

A Germany that is too strong or too weak has always troubled the European project. When healthy, the country can dominate the agenda. When struggling, it raises fears of dragging Europe down. Given economic worries and the AfD’s electoral win in Saxony-Anhalt, the conversation has tilted toward the latter.

Still, Germany has a lot going for it. It enjoys favorable borrowing conditions, is investing heavily in defense and infrastructure, and there is no immediate prospect of a far-right government taking power in Berlin. The bigger risk is that the country responds with national solutions rather than strengthening the EU.

Germany is among six northern countries demanding that the commission cut several hundred billion euros from its proposed long-term budget. At the same time, Berlin has opened its own coffers for infrastructure and military spending. Anyone who has tried to take a train through Germany can see the benefits—and better infrastructure helps European preparedness. But there is a mismatch.

The same goes for defense: Germany is closing the gap, but greater German power will only strengthen the continent if it is embedded in European frameworks. With the AfD’s rise likely to increase pressure for national-level solutions, Berlin needs European answers to its problems at home.

Judy Dempsey

Nonresident Senior Fellow, Carnegie Europe

What a question given the pressure Chancellor Friedrich Merz is under! His popularity is at an all-time low. His party, the Christian Democratic Union, is being decimated in the polls. Wait until the Berlin and Mecklenburg-Vorpommern state elections. After the debacle in Saxony-Anhalt, where the far-right, anti-immigration AfD won the most votes, Merz is under immense pressure to resign or change course.

This is bad news for Europe. As the EU’s biggest economy, Germany matters. In these tumultuous times, the continent needs a stable, predictable partner in Berlin. It is not a given.

Yet, Germany is Europe’s biggest financial, military, and economic supporter of Ukraine. It is revamping its armed forces. Its defense budget will increase to €109 billion ($124 billion) in 2027, up from €82.2 billion ($93 billion) in 2026. The spending increase is a fundamental and welcome shift in Germany’s foreign policy.

As for China, Germany is losing 10,000 manufacturing jobs per month as a result of Chinese exports. In October, European leaders will decide on new trade defense measures. Germany holds the key: Ought it to continue its dependence on China to the detriment of its own industries or support the EU’s new, tougher policy? Under Merz, the latter could happen.