The day after the regional election in the western state of Rhineland-Palatinate, Chancellor Friedrich Merz is in high spirits. His center-right Christian Democratic Union (CDU) won the election.

"This gives us momentum for the reform agenda we have on the table in Berlin," Merz said. "I want us to make progress with the SPD. We're on the right track when it comes to migration and internal security, but when it comes to economic growth, competition and employment, we need to get everything moving together now."

The conservative bloc of Christian Democrats and Christian Social Union (CDU/CSU) has been in a coalition with the center-left Social Democrats(SPD) for just over ten months.

So far, they have managed to do little to tackle Germany's many problems: After three years of recession, the economy is still in the doldrums. The recovery promised by the government for this year has yet to materialize.

The war in Iran is putting massive pressure on the global economy and Germany.

Added to this is the budget crisis in the pension system, as well as in the health- and long-term care sectors. Germany's population is aging, and fewer and fewer people working have to support a growing number of retirees. Moreover, as a society ages, the costs of health care and long-term care are on the rise.

The far-right Alternative for Germany party (AfD), meanwhile, is cashing in on voter disenchantment.

Special commissions have been established to develop solutions.

The first results — on the topic of long-term care — are expected as early as March. By April, it should become clear how health care reform might proceed. The commission tasked with coming up with plans to reform the pension system plans to present its findings by the end of June.

Then, legislation must be drafted based on the recommendations and submitted to the Bundestag, the lower house of parliament, before it breaks up for summer recess.

Germany's center-left SPD is weakened

Tha is a tight schedule that leaves no time to address internal party issues. Yet those are precisely what the SPD now has to deal with.

In the first two state elections of the 2026 election year, things could not have gone worse for the party. On March 8, in the wealthy state of Baden-Württemberg, it garnered only 5,5% of the vote, the worst result in postwar history, barely managing to pass the 5% threshold for representation in the state parliament. Two weeks later, in Rhineland-Palatinate, after 35 years in power, it was decisively relegated to second place behind the CDU, with its worst-ever election result in that state.

That election result is feared to be the proverbial straw that breaks the camel's back: The party has been in a downward spiral for years. The once-proud workers' party, which in its heyday could win over every second voter, now stands at only 14% to 16% in national polls.

Klingbeil and Bas are holding on to their jobs

Tensions are running high within the SPD, and calls for the party leadership to resign are growing louder. The two SPD co-chairs, Lars Klingbeil and Bärbel Bas, say they will not shy away from such a debate. However, they note that now is a particularly bad time for personnel changes.

"We will not plunge the second-largest governing party into chaos," promised Klingbeil, who also serves as federal minister of finance and vice chancellor in Merz's government.

Klingbeil said that the party executive committee had reached the clear consensus that "we want to shape the future not by replacing leaders, but by setting a clear programmatic and strategic course."

Will the party — and in particular the SPD's left wing — toe this line? There has been unrest there for some time now, as the party has been posting increasingly poor election results at both the federal and state levels.

"We expect the SPD not to engage in self-flagellation now," Bärbel Bas said on Monday. She also serves as minister of labor, and insists that prolonged debates over personnel would not help in this situation.

This coming Friday (March 27), the Social Democrats plan to hold a large-scale discussion on the consequences and the party's future course. The party leadership and representatives from the federal states and municipalities governed by the Social Democrats are all expected to participate.

Reforms, but at whose expense?

Meanwhile, CSU leader Markus Söder has called the SPD's situation "dramatic" and warned against a shift to the left.

"We very much hope that the SPD will draw the right conclusions from the election results. In our view, a wrong conclusion would be to move further to the left; rather, we need reforms, but with the right balance," Söder said.

The fact is that the conservative CDU/CSU and the Social Democrats have quite different ideas about how to get Germany back on track.

The CDU/CSU want to cut social benefits, the SPD does not. The Social Democrats want to stabilize the systems by raising taxes on the wealthy, the CDU/CSU do not. 

The debates are likely to become much tougher and more heated, with the SPD's combativeness and tenacity increasing.

"We've lost the voters' trust because the SPD never wanted to ruffle any feathers on many issues," says Bas.

"Anyone who thinks that reducing the welfare state will lead to more economic growth: Those concepts failed in the 1990s," party co-chair Klingbeil added.

Germany's governing coalition doesn't have much time

The federal government faces difficult times and has to act under time pressure.

"I understand that the SPD is struggling with this election result and has to come to terms with it," the chancellor said on Monday. But his coalition has to pull together and deliver.

There is not much time left. Three more state elections will take place in September — in two eastern German states and in the city-state of Berlin. Election campaigning will begin this summer. By then, as everyone involved knows, the reforms must be well underway.

This article was originally written in German.

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