Emmanuel Macron is very weakened in France. Pedro Sánchez is in an equally complicated position in Spain, without the ability to move forward with a budget and already criticized in Brussels for his government's reluctance to increase investment in Defense. And Giorgia Meloni remains close to US President Donald Trump, while the tycoon threatens a trade war with Europe and suggests that EU security is no longer a priority for his administration. The leaders of three of the four largest European powers have many problems and constraints to become the political leaders that Brussels is desperately seeking, so the arrival of the next German chancellor is eagerly awaited in the EU capital, hoping that they will have a strong voice. Much stronger than Olaf Scholz had, although for this to happen, Friedrich Merz must be able to form a solid government.
Because in the city of European institutions, the new chancellor will have to address numerous challenges, starting with military investment. The European Commission is already working on a proposal to relax European fiscal rules, activating the escape clause for investments in Defense and making it easier for countries to spend much more. Additionally, the possibility of issuing European debt and for the European Investment Bank (EIB) chaired by Nadia Calviño to significantly increase its efforts in this area is being considered. Ultimately, Germany's stance will not only be very important but vital for these initiatives to move forward.
Moreover, Germany is one of the few countries with a Defense industry, and the Commission's plan is for the substantial spending in this area to have a positive impact on European companies. It should be a source of innovation and boost the struggling economies of both the EU and Germany.
The future of Ukraine will be another crucial point in the coming months. While the European Union is not part of the negotiations that the United States and Russia are already having for a possible peace process, Europe will have to directly face the consequences of these talks. Equally relevant will be Europe's role in the country's reconstruction and, directly linked to Defense, military missions to ensure that the conflict does not reignite.
There is still no clear position on the latter, but British media reported last week that Macron and British Prime Minister Keir Starmer will present Trump with a proposal that includes deploying 30,000 soldiers in Ukrainian territory as well as using Typhoon fighter jets. Germany has been left out of this proposal, but it is expected that the chancellor will have his own stance.
The trade war, of course, will be another important point on Merz's tight agenda in Brussels. To pressure with measures that help Europe but also to take actions that protect the German industry. One of the clearest cases is the automotive sector, where Trump has already announced a 25% tariff starting next April. Trade Commissioner Maros Sefcovic was in Washington last Wednesday trying to negotiate a reduction in the tariffs announced by the US president in exchange for reducing those imposed by the EU on American vehicles, but there has been no official response yet. Much more will be needed, and above all, decisiveness. European Commission President Ursula von der Leyen has already stated that this will be the case. The "taxes" imposed by the American president on trade "will not go unanswered." But once again, any measure or action supported by Germany will carry more weight.
On a purely national level, Merz will have the green transition as one of the main negotiation points with Brussels. The aforementioned German automotive industry is in a very delicate moment, with a significant loss of competitiveness and thousands of job cuts. Only Volkswagen has already agreed with unions to lay off 30,000 workers by 2030. The new chancellor has stated that he wants to postpone the end of combustion engines, planned for 2035, and will seek fiscal space to increase industrial investments, but major manufacturers are demanding more.
Meetings with Von der Leyen have already begun, and the Commission itself acknowledges the need for "flexibility" and to be "pragmatic" in decarbonization to avoid falling further behind the US and China, and also the leader of the European People's Party, Manfred Weber, is pushing for companies not to have to pay ¤15 billion in fines this year alone for failing to meet climate targets. This would not only prevent companies from investing in innovation but could even lead to firms relocating. They could leave German and European territory. "Policies will determine whether future investments will be made in Germany, whether innovations will be developed here, creating new jobs, or elsewhere," warn from the German automotive industry association.