Germany’s 2025 Election: Will Political Chaos Crash the EUR?

GordonGekko
Feb 20
2 min read

Germany’s February 23, 2025 election could shake up the country’s politics—and the value of the Euro (€). With rising immigration, inflation, and economic struggles, the vote is set to be one of the most unpredictable in years.

Germany’s February 23, 2025 election could shake up the EUR — Germany’s **February 23, 2025** election could shake up the EUR

Why This Election Matters

Germany, the largest economy in Europe, plays a major role in the stability of the Euro. A weak or unstable government could send the Euro falling, while a strong, stable leadership could help support its value.

Who’s Leading the Polls?

Christian Democrats (CDU/CSU): 30% – likely to win the most seats but may struggle to form a government.
Far-right AfD: 20% – gaining support, making coalitions harder to build.
Social Democrats (SPD), Greens & Free Democrats (FDP): Losing support, struggling to stay in power.

The challenge? Germany’s government is built on coalitions. If no party wins outright, they’ll need to team up—and that could take months.

How It Affects the Euro (€)

If the far-right AfD does well, markets could panic, fearing instability. Euro could fall towards 1.00 USD (€ = $1).
If CDU/CSU forms a stable two-party government, the Euro might see some support, but economic challenges could still weigh it down.
If coalition talks drag on for months, uncertainty could hurt investor confidence, weakening the Euro.

Germany’s Economic Struggles

GDP has shrunk 0.2% annually since 2023.
Inflation is high, wages aren’t keeping up.
Factories and industrial output are slowing.
Trade pressure from the U.S. and China is growing.

While the U.S. and UK economies have grown over the last three years (7.4% and 5.5% total, respectively), Germany is falling behind.

The Best-Case Scenario for the Euro

A CDU/CSU-led government with a clear economic recovery plan could help stabilize the Euro. However, Germany’s strict debt rules may prevent big spending, limiting how much the economy can improve.

What to Watch

Election results on Feb 23.
Coalition talks – will they drag on?
Euro movement – will it weaken or recover?

Bottom Line: If Germany’s election leads to months of uncertainty, expect the Euro to take a hit. If a stable coalition forms quickly, the damage could be limited. Investors and businesses should brace for volatility!