This weekend’s regional elections in Saxony and Thuringia have revealed significant shifts in the German political landscape, reflecting a country grappling with multiple crises. Although these were only regional elections, their outcomes carry national implications, particularly given the participation of nearly three-quarters of the five-million electorate. Here are the main takeaways:

The political mainstream has collapsed

The main opposition party, the centre-right CDU, maintained its dominant position in Saxony by a tiny margin. But the party now faces a choice: change or continue to shed votes to the AfD. The CDU’s involvement in centrist coalitions, driven by the necessity of excluding the AfD, has diluted its political identity. Also quite paradoxically, the rise of the AfD has been fuelled precisely by the migration policies of former CDU chancellor Angela Merkel.

The CDU now finds itself weakened, unable to form coalitions without compromising its traditional stances, and without striking alliances that would have been unthinkable a few years ago, such as with the newly formed left-populist Sahra Wagenknecht Alliance (BSW) — an option that is currently being explored by both parties. Incredibly, the BSW is now the third-largest party in both states — an impressive feat for a party that was launched just a few months ago.

For a deep dive into the Sahra Wagenknecht Alliance, and how her blend of old-school leftist economics, pro-peace and anti-NATO foreign policy, and conservative cultural outlook is redefining populism — and upending German politics — see this recent article of mine. (It is reproduced as an addendum below.—Ed)

The transplantation of the FRG’s economic order into the former GDR was the most brutal neoliberal shock therapy ever implemented in a European country...The first instrument of this shock therapy was monetary integration, which involved the former GDR’s adoption of the West-German mark, which was highly overvalued relative to the fundamentals of the East-German economy.

Migration and war: the central issues

The vote has confirmed that migration remains the “mother of all domestic policy problems”. The inability to manage migration effectively has eroded public trust in traditional parties. The AfD’s success can be attributed largely to its hardline stance on immigration, a position that has gained traction even among former left-wing voters who now support the Sahra Wagenknecht Alliance. This development suggests that migration will dominate the upcoming federal elections, turning them into a de facto referendum on Germany’s immigration policies. But opposition to war and to the government’s belligerent approach to the Russia-Ukraine crisis clearly also played a role, especially among young people. Sahra Wagenknecht, in particular, has put opposition to NATO and to the deployment US long-range missiles on German territory, and the question of détente with Russia, at the centre of her party’s platform. 

A new left-right populist spectrum  

The most interesting takeaway from the elections is probably the emergence of a new, and unique in the European panorama, left-right populist spectrum, in the form of the AfD and the BSW, which collectively make up almost 50 percent of the votes. This underscores that dissatisfaction with the established parties is even larger than what right-populists parties alone are able to capture: a lesson for other countries as well. For now the BSW has ruled out forming regional coalition governments with the AfD, which is understandable from a tactical standpoint: many disaffected voters from the centre and the left are turning to the BSW precisely because it is not the AfD. But in the future the mood might shift: if the establishment refuses to respond to popular concerns, the demand for a left-right populist front could grow. Meanwhile, the fact that both ends of the political spectrum are converging on similar migration policies suggests that this issue may hopefully be approached more pragmatically, rather than through the lens of morality.

An increasingly divided country

One cannot understand the populist uprising sweeping eastern Germany without understanding the economic, social and political trauma that reunification — or better, the East’s annexation by the West — was for many eastern Germans, and how this legacy continues to this day. As I recently wrote in Compact:

The transplantation of the FRG’s economic order into the former GDR was the most brutal neoliberal shock therapy ever implemented in a European country.

The first instrument of this shock therapy was monetary integration, which involved the former GDR’s adoption of the West-German mark, which was highly overvalued relative to the fundamentals of the East-German economy. This shattered the profitability of East-German firms, which quickly became insolvent, resulting in the immediate collapse of GDP and a sharp rise in unemployment. Most ominously, it kicked off what one study described as a “dramatic process of de-industrialization”.  

The second instrument was the mass privatization of state-owned firms, houses, and land by the infamous Treuhandanstalt, a West-German government-controlled trust agency that took control of almost all the assets of the former GDR with the aim of privatizing them as quickly as possible. By 1992, more than 80 percent of firms had already been privatized or closed. The overwhelming majority of the firms were sold to West German investors and companies—at bargain prices, of course. 

In other words, virtually the entire economy of the former socialist state passed into the hands of West-German capitalists.

[This is reflected in] the stark economic disparities that persist between West and East Germany more than three decades after reunification, when the territories of the GDR were incorporated into the FRG in 1990. The states that make up the former East Germany generally have lower GDP per capita and wages, higher unemployment and poverty rates, and poorer infrastructure and public services than those in the West. In 2017, net national income per capita in East Germany was still only 73 percent of what it was in West Germany. 

A wake-up call

In conclusion, the recent regional elections serve as a wake-up call for Germany. They highlight the urgent need for political realignment and the dangers of ignoring the concerns of significant portions of the electorate. The implications extend beyond Germany, affecting its role in the European Union and the broader geopolitical landscape.

This is a longer version of an article that appeared in UnHerd.

Thanks for reading. Putting out high-quality journalism requires constant research, most of which goes unpaid, so if you appreciate my writing please consider upgrading to a paid subscription if you haven’t already. Aside from a fuzzy feeling inside of you, you’ll get access to exclusive articles and commentary.

Thomas Fazi

Website: thomasfazi.net
Twitter: @battleforeurope 

Latest book: The Covid Consensus: The Global Assault on Democracy and the Poor—A Critique from the Left (co-authored with Toby Green)