Olaf Scholz has proposed federal elections to take place in March or April 2025. The leader of the opposition, Friedrich Merz, is pushing for federal elections already in January 2025. Considering the more recent outcome of elections at German state level, it might take some more weeks to negotiate a coalition between different political parties. Against that background, it might take until the end of Q1 or Q2 in 2025 that a new German government actually takes office.
Interim phase
Until a new German parliament will have been elected and a new German government will have taken office, the current government will remain in office and be entitled to continue governing Germany; however, any decision to be approved by the German parliament will depend on ad-hoc majorities that the government will have find on a case-by-case (or: law-by-law) basis given that the remaining government can no longer rely on a coalition-based – aoshearman.com and thus reliable – majority in the German parliament. The opposition led by the Christian Democratic Party has already announced that it would consider very carefully any kind of collaboration with the remaining government. Any bill that does not pass the legislative process prior to the election will have to be re-submitted to the parliamentary process after the election with the process starting from the very beginning due to the constitutional principle of discontinuity.
Impact on important topics
As a rule, parliament must approve the German federal budget for 2025 by December 31, 2024. As long as the remaining government does not obtain a parliamentary majority for the 2025 budget, the government and the federal administration will only be able, from January 1, 2025 onwards, to fulfill existing obligations; they will not be allowed to enter into any new financially relevant obligations. The government and the administration will not be shut down but materially restricted in their activities. Even legislation that is required to transpose EU laws into German laws may be affected. If proposals that aim at complying with Germany's obligation to enact relevant legislation are not approved by an ad-hoc majority, Germany will infringe its obligation to transpose relevant EU laws within the transposition deadlines – or even continue infringing compliance with EU laws in cases where the transposition deadline has already expired, such as in relation to the EU Corporate Sustainability Reporting Directive (CSRD). Further, a number of initiatives and legislative projects of the initial three-party coalition are likely to be delayed or unlikely to come. Amendments to the power grid fee regime in the energy sector, a support package for the German car manufacturers, a revision of the German foreign direct investment screening regulations or the push for less bureaucracy as symbolized by amendments or even the repeal of the German Supply Chain Due Diligence Act.
Interaction with politicians and governmental officers
Stakeholders that consider interaction with politicians and governmental officers in these times should ensure compliance with the more recent German Lobbying Act and may be required to register with the lobbying register that is maintained by the German parliament's administration.
Outlooks
The electoral campaign is likely to be driven by topics such as security and competitiveness. This marks a significant departure from the number one topic of the last three years, i.e. climate change. Germany is likely to take a similar route as the EU according to the agenda proposed by EU Commission President Ursula von der Leyen and the proposal presented by Mario Draghi, former European Central Bank President, which push for more efforts in the security and defense sector as well as for more competitiveness of the European economy as a whole. Interestingly, the regular term of a new German government is four years – i.e. the new German government may be in office in parallel to a number of other governments and administrations that have taken office more recently or will take office soon, such as the EU Commission, the UK government and the Trump administration in the USA.
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