Germany’s populist, pro-Russia party’s economic policies would be a disaster for the country

Ulrich Siegmund of the Alternative for Germany (AfD) party speaks alongside co-leaders Alice Weidel and Tino Chrupalla on Sept. 6. Fabrizio Bensch/Reuters

It’s hard to pinpoint the moment when Germany’s slide from industrial and economic greatness began, but the mid to late years of Angela Merkel’s reign would be a good guess. She was chancellor from 2005 to 2021 and her strategies and policies are coming back to haunt Europe’s most powerful country. The rise of the populist, hard-right, Euroskeptic, pro-Russia Alternative for Germany party, which just won its first state election, is no accident.

In 2011, Ms. Merkel made the fateful decision to close Germany’s fairly modern, accident-free fleet of nuclear generating plants merely for political reasons – to appease the Green Party. Goodbye clean, dependable energy to feed Germany’s enormous industries, from cars to chemicals. At the same time, she doubled down on Germany’s bet on cheap Russian pipeline natural gas, a gambit that worked until Russia’s invasion of Ukraine in 2022 rudely interrupted the flows, triggering an energy crisis that accelerated deindustrialization.

In 2015, she invited one million refugees and asylum seekers, largely from the Middle East, into Germany. The AfD did not begin life as an anti-Muslim party but the mass arrivals played into its hands. The party became anti-migrant as well as Euroskeptic. It also campaigned against the European Green Deal – a 2019 initiative to cut the EU’s emissions by 50 per cent by 2030 – as it tried to find culprits for deindustrialization.

As late as 2021, when Ms. Merkel was on her way out, the mainstream centre-right and centre-left parties were not in a panic about the AfD’s presence. In the 2021 federal elections, its share of the vote fell to 10.4 per cent from 12.6 per cent in 2017 and it hadn’t won a single state election, though its stronghold in the former East Germany seemed solid.

AfD victory in a German state election clouds Merz’s reform agenda

Everything changed on Sunday, when the AfD won almost 44 per cent of the vote in Saxony-Anhalt in north-central Germany, putting it in pole position to form its first state government and utterly humiliating the Christian Democrats (CDU), the conservative party led by Chancellor Friedrich Merz. He had promised to halve the AfD’s support; instead, it doubled and it was the CDU’s that halved. On Wednesday, as the pressure piled on him to explain his party’s collapse and devise plans to revive it, he called the AfD’s anti-immigrant policies tantamount to “ethnic cleansing.”

He may not survive as chancellor.

The AfD’s compelling win sent shockwaves through the EU as well as Germany, emboldening far-right parties here and there and raised serious questions about Germany’s economic, strategic and political direction. The AfD seems bound to rise federally as well. In the 2025 election, it won 20.8 per cent of the votes, making it the main opposition party. Various recent polls (INSA, Forsa, Infratest dimap) put the party in the lead, at 27 per cent to 29 per cent.

It seems unlikely that the AfD will ever form a federal government, partly because of the “firewall” commitment by the mainstream parties to shun the AfD in any coalition. But the AfD does not actually have to take power to exert power. The voter winds are blowing in its direction and its policies will influence the platforms of other parties struggling to remain relevant.

The AfD was formed in 2013 by economics professors and began life as an anti-euro party advocating for Germany’s exit from the euro zone. It still maintains that position, though somewhat less forcibly so. The euro would collapse if Germany were to leave, and most Germans support the use of the currency. The AfD no doubt knows this goal is a lost cause.

Mason: Germany takes a chilling turn to the far right

Its pro-Russia stance is far more worrisome. The party wants to bring Russia back into the German family fold, lift sanctions on Moscow and restart Russian gas imports. The AfD’s Russia love-fest includes its desire to reactivate the Nord Stream gas pipelines that went from Russia into northern Germany. Those pipelines were blown up seven months after Russia invaded Ukraine, by culprits unknown.

Rebuilding ties with Russia would be an economic and geopolitical disaster for Germany and the EU. There is nothing that Russian President Vladimir Putin would like to see more than Europe’s dominant economy to again be dependent on Russian gas; he would salivate over the blackmail potential. At the same time, Germany, by necessity, has made great strides in ramping up renewable energy. That progress would go into reverse if Russian gas were to flood the German market.

The AfD was right to oppose the elimination of Germany’s nuclear fleet. It wants to reopen the nukes, but that moment has passed. Restarting them would costs tens of billions of euros. There is no money to do so when the country is busy spending similar amounts on rebuilding its military.

The AfD also wants tax cuts, but has failed to cost them out to sees if they are affordable. Ditto migration. If the flow of foreign workers into Germany – read: cheap labour – were to stop, all German industries would suffer, no doubt accelerating deindustrialization, not reversing it. The AfD has captured voters’ imaginations despite economic and immigration policies that, if implemented, would damage the country severely. Ms. Merkel can take some of the blame.