The European Union has begun assessing contingency scenarios in case German Chancellor Friedrich Merz leaves office or becomes increasingly focused on domestic political difficulties, Politico Europe reported Friday, citing diplomats and European officials.

According to the report, governments in two European countries have held internal discussions on how a possible end to Merz’s chancellorship could affect EU policymaking.

The discussions reportedly reflect growing concern in Brussels over political instability in Germany following major electoral setbacks for Merz’s governing conservatives and renewed tensions within the coalition.

Recent regional elections have weakened Merz politically. Reuters reported that the Christian Democratic Union (CDU) suffered its worst-ever result in Mecklenburg-Western Pomerania in September, failing to clear the threshold to enter the state parliament, while the Alternative for Germany (AfD) made further gains.

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Berlin’s Political Turmoil Raises EU Concerns

Politico Europe reported that officials consider two scenarios particularly disruptive: Germany being left without an effective leader or a right-wing government emerging in Berlin. However, the report said both scenarios are viewed as unlikely in the short term.

Under Germany’s constitutional system, a chancellor cannot simply be replaced by a successor appointed by the governing party. The Bundestag elects the chancellor, meaning any leadership change would require the necessary parliamentary majority.

For Brussels, the political uncertainty matters because Germany remains the EU’s largest economy and a central actor in negotiations over major bloc-wide policies.

Reuters reported Thursday that Merz is facing growing domestic pressure, while speculation about possible successors has emerged within the CDU. Merz has nevertheless rejected calls to step aside and continues to pursue his government's policy agenda.

EU Budget Dispute Adds Pressure

Merz’s domestic political position could also affect negotiations over the EU’s next seven-year budget.

According to Politico Europe, Germany is part of a group of member states, including the Netherlands, Sweden, Denmark, Austria, and Finland, seeking substantial reductions to the proposed long-term EU budget. The report said officials believe domestic political pressure could encourage Berlin to take a tougher negotiating position in Brussels.

The budget dispute comes as EU governments debate competing priorities, including defense, industrial investment, infrastructure, and support for Ukraine.

Military Buildup Remains Central to Merz’s Agenda

Despite the political pressure, Merz's government continues to prioritize strengthening Germany’s armed forces. Reuters reported that Berlin’s debt-financed investment drive is supporting both infrastructure and military expansion, while the government has committed hundreds of billions of euros to rebuilding the armed forces.

Merz has also reaffirmed Germany’s support for Ukraine and called for stronger European military capabilities, while accusing Russia of conducting hybrid attacks against Europe. Moscow has rejected such accusations.

Any change in Berlin’s political leadership would therefore carry implications beyond Germany, potentially affecting EU budget negotiations, defense policy, relations with Russia, and the bloc’s wider strategic direction.

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