AfD win in Saxony-Anhalt strains Merz coalition and reform plans

The far-right Alternative for Germany (AfD) won a historic state election victory in Saxony-Anhalt on Sunday, deepening divisions within Chancellor Friedrich Merz's coalition government and threatening his planned economic and social reform agenda. The result reflects public frustration over bureaucracy, living costs, and economic insecurity. Merz insists his reform package, including raising the pension age and clamping down on sick pay, must proceed, but his Social Democrat (SPD) coalition partners are demanding talks to soften the proposals and reopen debates on the 2027 budget and wealth taxes. Analysts warn the internal tensions could delay or derail the reforms entirely. The AfD, which came second in the 2025 federal election, fell short of an overall majority in the state parliament. While Saxony-Anhalt represents only 1.8% of German GDP, economists fear the victory could deter foreign investment and signal waning public support for European integration and open markets.