Germany Unveils Reform Plan as AfD Surges in Polls

On July 2, Chancellor Friedrich Merz's CDU/CSU-SPD coalition ended seven hours of talks with a 34-point "Programme for Revival and Employment": about €10 billion a year in income-tax relief for low and middle earners from 2027, a pension overhaul that gradually raises the retirement age in line with life expectancy, fixed-term contracts extended to 48 months, and -- the most politically charged item -- the end of phone-in sick notes, requiring a doctor's certificate from the first day of illness rather than the fourth. Business groups and Deutsche Bank welcomed it; the unions Verdi and IG Metall, along with the Greens, called it a vote of mistrust in workers. Al Jazeera's framing of the package as an attempt to revive the economy "and counter a surge by the far right" was not spin: Merz unveiled it four days before the AfD gathered in Erfurt, with the party now polling 41 percent in Saxony-Anhalt -- nearly 20 points clear of his own CDU -- and a real chance of governing a German state outright after September's election, a lead that has been building since at least mid-June.

That congress delivered no surprises and no crisis. Delegates re-elected Alice Weidel with 81.3 percent and Tino Chrupalla with 70 percent, down from 83 two years ago, rejecting a push to replace the co-leadership with a single chair, while Bjorn Hocke's allies gained ground on the executive board and the party deferred any reckoning with members who have extremist pasts. Outside, more than 30,000 protesters gathered under heavy police presence -- Thuringian officers logged 65 criminal offences and mostly described the demonstrations as peaceful, though three journalists from Apollo News were assaulted and a Junge Freiheit reporter had his phone stolen, drawing condemnation from the Union and the Greens alike. The party's Russia problem surfaced in parallel: Chechen-born AfD member Murad Dadaev, already facing expulsion proceedings in Lower Saxony after a trip to meet Ramzan Kadyrov's inner circle, announced he had enlisted in the Russian army and posted photos of himself in uniform in occupied Bakhmut.

That backdrop is what pushed Defense Minister Boris Pistorius, of coalition partner the SPD, to say aloud what Berlin's security establishment had been signalling for weeks: he does not trust the AfD with state secrets. Pistorius said he would move to cut regional governments off from classified intelligence-sharing if the AfD wins power in Saxony-Anhalt or Mecklenburg-Vorpommern in September, citing the party's "undeniable" ties to Moscow, and separately urged AfD-sympathising soldiers to reconsider their loyalties. His warning landed two days after the domestic intelligence agency, the BfV, published its 2025 report naming Turkey -- alongside Russia, China and Iran -- as a primary state actor running espionage and transnational repression inside Germany, tracking Ankara-aligned networks from the Grey Wolves to Milli Gorus. The juxtaposition was pointed: in the same week Germany's security services classed a NATO ally's intelligence services as a threat, its own defence minister said much the same about an insurgent party that is currently polling ahead of his coalition in the east.

Berlin's foreign ministry, meanwhile, summoned China's ambassador on July 3 over reports that Chinese military facilities had secretly trained around 200 Russian soldiers in late 2025 -- a three-week course in radiological, biological and chemical defence, approved personally by Russian Defence Minister Andrei Belousov, with some of those soldiers later deployed to Ukraine. Beijing dismissed the account as "groundless speculation aimed at driving a wedge," but EU foreign policy chief Kaja Kallas said she had confirmed the training independently, and Berlin called it "deeply disturbing" and a threat to European security -- language that puts China, for the first time this bluntly, on the same list of adversaries as Russia in the government's public rhetoric.

The same week gave Germany's rearmament push a distinctly national accent. Having watched the Franco-German FCAS fighter jet programme collapse in June -- Merz confirmed the New Generation Fighter dead at the ILA Berlin air show, after months of Dassault chief Eric Trappier warring publicly with Airbus over workshare -- Berlin launched its own Combat Fighter System Nucleus, a €580 million tender restricted to German firms (Helsing, MBDA Deutschland, Rohde & Schwarz, Hensoldt) that amounts to a national combat cloud, plus a satellite constellation separate from the EU's IRIS² project. France and Germany are due to settle who owns the remaining "system of systems" architecture at a ministerial council on July 17; until then, Berlin is hedging by building its own. The bill for that hedge, and for the welfare reforms, is being paid in debt: reporting on the 2027 draft budget points to roughly €180 billion in new borrowing for 2026, the second-highest in German postwar history after the pandemic, as the OSW Centre for Eastern Studies has flagged while tracking Berlin's push toward defence spending near 3.5 percent of GDP by 2029.

Elsewhere, Germany closed one of its longest environmental fights and opened others. The government permanently protected the last 14 percent of the Hambach forest from RWE's lignite mining, ending a 50-year campaign that will turn the site into a public wilderness area by 2035. A fire at a Ludwigslust hospital killed two patients and forced evacuation of the 160-bed facility; prosecutors raided German Football Association headquarters and city administrations in Frankfurt and Gelsenkirchen over Euro 2024 ticket-corruption allegations; and the University of Munster opened Europe's first Islamic theology faculty at a public university. Robert Habeck, the former vice chancellor who managed Germany's energy transition through the Ukraine war, took a private-sector advisory role at the Danish investment firm Urban Partners. And in Berlin's Tiergarten, a new memorial to Jehovah's Witnesses persecuted under the Nazis drew criticism from historian Tim B. Muller, who argues the modern church does not represent the schismed 1930s movement, and from author Stefanie de Velasco, who called the group "totalitarian."

Estonia's prime minister, in Berlin this week to press Merz and Baltic leaders for a full EU embargo on Russian oil, argued Moscow is at its weakest in years and that allies should press the advantage rather than ease up -- a case Germany's own numbers half-support, with Russia's first-half budget deficit hitting 6 trillion rubles and defence now 48 percent of state spending. But Berlin's own security state is spending the summer bracing not for Moscow's army, but for a ballot box result it may not be able to stop. The real test comes in September, when Saxony-Anhalt and Mecklenburg-Vorpommern vote and Berlin finds out whether €10 billion in tax relief and a faster path through the bureaucracy mattered more than 41 percent in the polls.