AfD win in Saxony-Anhalt strains Merz coalition over reforms

The far-right AfD's historic victory in Germany's Saxony-Anhalt state election has reopened divisions in Chancellor Friedrich Merz's coalition government, with Social Democrat partners demanding that planned economic and social reforms be softened. The result reflects voter frustration over bureaucracy, living costs, pensions, and economic insecurity. Merz insists the reform package, including raising the pension age and clamping down on sick pay, must proceed, but the SPD is pushing for talks on changes to pension and care proposals, a new 2027 budget discussion, and a debate on inheritance and wealth taxes. Analysts warn the tensions could delay or derail the reforms entirely. The AfD, which came second in the 2025 federal election, won nearly a majority in the state parliament, though Saxony-Anhalt represents only 1.8% of German GDP. Economists fear the result could deter foreign investment and signal waning support for European integration, while experts urge deeper structural reforms to counter the AfD's rise by 2029.