Germany: Merz says 2026 can be a 'year of new beginnings'

Chancellor Friedrich Merz began his first New Year's TV address to the nation with a callback to February 23 and the early election that led to the conservative becoming German chancellor, unseating Olaf Scholz and a Social Democrat-led government.

"You, the citizens, decided on the political future of our country that day. A new Federal Government was formed that has set out to steer Germany in the right direction with determination and a clear sense of direction," Merz said in excerpts of the speech seen by DW.

However, he acknowledged immediately that this goal was "no small task."

He said 2025 had presented Germany and the wider world with a series of major challenges.

"A terrible war is raging in Europe, one that poses a direct threat to our freedom and our security. Our economy is coming under pressure from necessary reforms, high costs and global trade conflicts. Moreover, new technologies are revolutionising our world of work and the way we live together," Merz said.

Against this backdrop, Merz said, his government saw its fundamental mandate as "the renewal of the foundations of our freedom, our security and our prosperity."

Renewing these foundations would only be possible "if we safeguard peace in Europe," the chancellor said, noting how Ukraine would be seeing in a fourth consecutive New Year "under the most difficult circumstances."

Merz insisted the war in Ukraine was not a "distant" one of no concern to Germany.

"After all, we are seeing more and more clearly that Russia's aggression was and is part of a plan targeted against the whole of Europe," he said. "Germany is also facing sabotage, espionage and cyberattacks on a daily basis."

Although the chancellor did not directly connect the idea to either Russia's war of aggression or Germany's increased defense expenditure, he also made reference to changing ties to the US amid Donald Trump's return to the White House.

"At the same time, our partnership with the United States of America, which has long been the reliable guarantor of our security, is changing," Merz said. "For us Europeans, this means that we must defend and assert our interests much more strongly by ourselves."

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The Christian Democrat, with a background in corporate law outside of politics, lamented what he called "a return to protectionism in the global economy." Germany's "strategic dependence on raw materials is increasingly being wielded as a political lever against our interests," he said, with Germany as an exporting nation feeling the effects particularly keenly, hinting at the fiscal problems for major industries like carmakers.

He said his government was seeking to provide relief in areas including taxation, energy prices and cutting red tape.

But Merz also said that "homegrown reform backlogs are paralysing the potential of our companies," at exactly the moment where the economy's creativity and innovation was required to counter global pressures.

It was becoming "increasingly difficult" for German companies to hold their own internationally, Merz warned, later implying some fault also lay with the European Union in Brussels.

"We are consistently cutting red tape and putting the promotion of competitiveness at the top of the political agenda," he said of his government's efforts in negotiations at the EU level.

The chancellor, who at 70 recently passed Germany's standardized retirement age himself, also made reference to the country's aging population, saying that "the baby boomers will now commence their well-deserved retirement."

Merz said that in 2026 it would therefore be essential "to create a new balance in our social security systems," taking the concerns of all generations into account "in a fair manner."

He also devoted time to the domestic flashpoint policy of migration, in a speech that never explicitly mentioned the challenge from the populist right-wing Alternative for Germany (AfD), or indeed any other rival party.

Merz said his government was trying both to create new avenues for legal migration, while also closing routes for illegal and disorderly migration.

"For us, humanity and order are two sides of the same coin," he said.

The chancellor alluded to public frustration at his coalition government's infighting and difficulties implementing several banner reforms, such as welfare and pension changes, by acknowledging that many felt the government's achievements to date were "not enough."

"And I want to tell you that you are right! It is not enough," Merz said. But he argued that the work had begun and that he was confident Germany "will reap the benefits of these reforms, even if it takes some time."

The chancellor argued that 2026 could prove to be "a year of new beginnings," in which Germany and Europe "reconnect with decades of peace, freedom and prosperity."

He said the various geopolitical, economic and techological developments did indeed represent an "epochal shift," but said it was up to Germany to overcome the challenges with its own strength.

"We are not the victims of extraneous circumstances. We are not at the mercy of great powers. Our hands are not tied," Merz said.