Germany hosts UAE President Sheikh Mohammed bin Zayed Al Nahyan at the Chancellery on Thursday, with Berlin and Abu Dhabi preparing investment, energy and technology agreements built on bilateral non-oil trade already worth around $15.5 billion a year.
Chancellor Friedrich Merz arrives at those talks only days after his Christian Democrats suffered one of their worst regional defeats in decades, as the AfD’s landslide in Saxony-Anhalt turned another eastern state election into a direct verdict on the chancellor himself. The contrast between the two settings, a head of state welcomed with full ceremony and a governing party reeling at home, is not incidental.
The AfD won 43.8 per cent of the vote in Saxony-Anhalt on Sunday, more than doubling its previous result and coming close to an outright parliamentary majority, while the CDU fell to around 17 per cent, ending more than two decades as the state’s dominant governing force.
Merz himself has admitted that his personal unpopularity contributed to the result; one exit poll found only 9 per cent of Saxony-Anhalt voters approved of his performance. That is the backdrop against which this week’s diplomacy is unfolding.
Berlin Still Does Statecraft
The UAE visit would ordinarily offer straightforward good news. Germany and the Emirates are expected to deepen cooperation in artificial intelligence, energy and investment, building on that existing $15.5 billion in annual non-oil trade, and the two governments want stronger links between German industry and Emirati capital.
Talks are set to cover economic relations, strategic cooperation and stability in the Middle East, according to the federal government.
These are precisely the areas in which Merz has tried to project confidence, since Germany needs investment, cheaper energy and new export opportunities after years of weak growth and pressure on energy-intensive industries.
Foreign policy also remains one of the chancellor’s stronger political terrains; Merz has presented Germany as firmly committed to Ukraine, NATO and closer relationships with Gulf partners. But the image of stability abroad now sits awkwardly beside events at home.
Saxony-Anhalt Changes the Mood
For Merz, the scale of the defeat is particularly damaging. He came to power promising to reduce AfD support by winning conservative voters back through tighter migration policy, economic reform and a more assertive centre-right identity.
Instead, the AfD is polling at roughly 28 per cent nationally and has shown that it can dominate parts of eastern Germany outright.
That makes it difficult to dismiss the result as an isolated regional revolt. The AfD drew support from workers, younger voters and people frustrated by pensions, living costs, migration and economic stagnation.
Saxony-Anhalt’s particular eastern German history carries real weight, but the dissatisfaction increasingly reaches beyond one region.
Merz Chooses Confrontation
The chancellor responded by attacking the AfD more aggressively. Speaking in parliament this week, he accused the party of promoting a form of what he called ethnic cleansing through its concept of remigration, which advocates large-scale removals of migrants.
He also attacked its pro-Russian positions and warned that mass expulsions would damage sectors dependent on foreign workers, a charge the AfD rejected as an attempt to smear political opponents.
The confrontation marks an important change in tone. Merz previously tried to weaken the AfD partly by occupying more conservative territory on migration; after Saxony-Anhalt, he appears increasingly willing to draw a sharper moral and institutional boundary instead.
Yet rhetoric alone does not solve the CDU’s dilemma, since its firewall against formal cooperation with the AfD remains intact, and the larger the AfD grows, the harder that firewall makes coalition building for everyone else. Saxony-Anhalt illustrates the problem plainly: the CDU can refuse cooperation with the largest party, but building an alternative majority may require alliances across increasingly incompatible parts of the political spectrum.
His Coalition Is Fraying Too
Merz also faces pressure from inside his federal coalition. His Social Democratic partners are questioning elements of the government’s economic reform programme after the election defeat, and proposals affecting pensions, healthcare and social spending have grown increasingly difficult to defend as voters complain about economic insecurity.
Merz insists that abandoning structural reform would make Germany’s underlying problems worse, and has defended plans intended to make pension and welfare systems more sustainable, saying retreat is not an option.
Economically, that argument has logic. Politically, unpopular reforms grow much harder to implement once the governing parties are losing elections to an opposition promising protection from precisely those changes.
The chancellor therefore faces pressure from both directions: moving further right on migration risks legitimising AfD framing without recovering its voters, while moderating his economic reforms would weaken the programme on which he built his reputation for competence. Continue unchanged, and another electoral defeat could make the argument over his leadership unavoidable.
Two More Elections Are Coming
Merz has rejected suggestions that he should resign. After Saxony-Anhalt, he called the result a historic defeat for the CDU but declared that giving up is not an option, even as influential commentators and political figures have begun discussing potential successors, including North Rhine-Westphalia premier Hendrik Wüst.
The calendar gives him little time to recover.
Berlin and Mecklenburg-Western Pomerania vote on 20 September, with the AfD particularly strong in the latter, while Berlin could produce another fragmented result difficult for the established parties to manage. Another AfD breakthrough would make Saxony-Anhalt harder to explain away as regional exceptionalism, which is why the UAE visit arrives at such a revealing moment.
Merz can still receive presidents, negotiate investment agreements and speak for Europe’s largest economy, and constitutionally his authority remains fully intact. Politically, however, authority also depends on convincing voters and allies that the government knows where it is going, and no amount of foreign investment will answer that question once the cameras leave the Chancellery.
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