For almost seven decades, Germany and France have been the most influential members of the European Union. As the largest economies and the most populated countries on the Continent, they were the leading forces behind historical decisions such as creating a single market, introducing a shared currency and designing supranational institutions to manage the bloc. While over the past two decades factors including EU enlargement (which added new member states and made decision-making more complex) and weak economic growth (which somewhat reduced Berlin's and Paris' ability to impose their policy preferences on smaller member states) have somewhat reduced their shared influence, Franco-German acquiescence is still necessary (albeit not sufficient) for the European Union to make crucial decisions on domestic and foreign policy. But over the past several months a succession of political troubles has forced Germany and France to prioritize domestic issues over EU issues, reduced their ability to influence policy decisions in the bloc, and made it harder for Berlin and Paris to find common ground on multiple issues. As these trends are likely to continue in 2025, the core engine of EU leadership will remain weak, leaving the bloc rudderless in terms of strategic direction and key policy decisions. This will undermine EU efforts to advance any significant initiatives, such as further economic and security integration or addressing its many global challenges.
Germany and France's Domestic Troubles
Several events over the past few months explain the current political disarray in Germany and France. Germany is governed by a coalition of three political parties with different ideologies and policy priorities, resulting in a dysfunctional government that struggles to get things done amid slow economic growth and significant budget constraints. State elections across the country between June and September have shown that the coalition members are unpopular and that voters are increasingly willing to support far-right and far-left forces. Germany's domestic troubles will likely worsen over the coming year, as the country will hold a general election by September 2025 that will force the parties in the governing coalition to differentiate each other in the eyes of voters, which is likely to result in deeper disagreements over policy.
Things are more complex in France, where a disappointing performance by centrist forces in the June elections for the European Parliament led to President Emmanuel Macron dissolving the National Assembly and calling for an early legislative election, which in July resulted in a heavily fragmented legislature where far-left, far-right and centrist forces lack enough seats to get anything done on their own. In early September, Macron appointed a conservative prime minister with the unenviable task of passing an austerity budget to reassure financial markets and EU institutions regarding Paris' commitment to reduce its high fiscal deficit. Should the National Assembly reject this budget, Macron will still have the power to approve it without a vote and avoid a financial crisis, but this would come at the expense of significant anti-government protests. Social unrest is likely in 2025 regardless of the budget's fate, as many voters are likely to protest the austerity measures while the left-wing will continue to claim (in the National Assembly and on the streets) that they have the right to be in charge of the government. Moreover, any French prime minister will be under the constant threat of a successful no-confidence motion against them. Unlike Germany, where the upcoming general election will give the country a chance to end its political deadlock in 2025, France's next presidential election is only scheduled for 2027.
The Franco-German Engine at an Impasse
These domestic problems are making it hard for Berlin and Paris to focus on EU policies or find common ground on EU-related issues, especially in those areas where their strategic views are significantly different. Foreign trade is one such area. Berlin is generally supportive of free trade agreements, especially if they benefit Germany's export-driven economy. Paris, by contrast, tends to be skeptical of deals that would open the French market to competitive products that could negatively affect segments of its economy, especially its agricultural sector. The EU-Mercosur free trade agreement is the clearest example of this situation, as Berlin has repeatedly called for the completion of negotiations, which have been stalled since a political agreement was reached in 2019, while Paris is trying to block them. While these differences predate the current political crises in Germany and France, the domestic turbulence in both countries is influencing the governments' positions, as France is seeking to avoid protests by farmers in an already volatile social context while Germany would like to conclude a deal that would somewhat help its ailing manufacturing sector.
The future of the EU economy is another source of disagreement. While both governments officially support a recent report by former European Central Bank President Mario Draghi to improve the EU's competitiveness, they disagree on key aspects of it. Notably, France backs Draghi's proposal to implement a new round of joint EU borrowing to invest in strategic sectors to make the block more competitive vis-a-vis China and the United States, an idea that Germany rejects for fear of increasing financial risk. This is another long-lasting debate that the present political turbulence has worsened, as the cash-strapped French government is keen on Brussels taking on spending that Paris cannot while the German government (and in particular the business-friendly Free Democratic Party, which controls the Finance Ministry) is allergic to any measures that could result in joint borrowing at the EU level. Paris and Berlin also disagree on nuclear power's role in the EU energy mix. France relies on nuclear energy and seeks to export its technology to other EU members, while Germany (which phased out nuclear power in 2011), opposes it. This leads to constant clashes over EU energy reforms, which often continue even after reaching agreements. As long as the Greens remain in Germany's coalition, the issue will persist, fueled by public skepticism of nuclear power.
Perhaps the most evident case of bilateral disagreements took place in early October, when the European Commission asked member states to vote on whether to impose extra tariffs on Chinese electric vehicles, which Brussels accuses Beijing of illegally subsidizing. France, whose automotive sector is not as reliant on the Chinese market and wants to protect its industry against foreign competition, vocally supported the tariffs. Germany, which has close trade ties with China and a significant presence in the country's automotive industry, campaigned against the tariffs, actively seeking support from other EU member states to block the tariffs. France eventually won a victory of sorts, as the European Commission was granted the power to proceed with tariffs, but only because a large number of member states abstained in the vote.
The Outlook for 2025
This trend of domestic troubles reducing Germany and France's ability to prioritize EU-related issues and limiting the room for reaching bilateral compromises will continue and potentially deepen in 2025. The first two quarters of 2025 will see Germany's ideologically heterogeneous coalition continue to struggle to agree on both domestic and EU policy. Policy paralysis will deepen in the third quarter, when the general election will likely take place, and continue during the fourth quarter, as postelection negotiations to form a coalition often take months. This means that Germany will spend most, if not all, of 2025 focusing on internal issues, which will reduce Berlin's appetite for meaningful EU reforms. After the election, the main goal of Germany's moderate parties will be to prevent the far-right from entering the government, which could result in another ideologically heterogeneous coalition.
France will not be so lucky. Its next presidential election is only due in 2027, and Macron cannot call for another legislative election at least until July of 2025 (which will be a last-resort option, considering how controversial and inconclusive the 2024 early election proved). Macron, who is in his second term and cannot be reelected, could in theory resign and call for a presidential election in 2025, but a leader so focused on his legacy is unlikely to do this. Moreover, unlike in Germany, an election in France would increase (instead of relieve) the political crisis, as both the far-right and the far-left would stand a decent chance of winning while Macron's centrists and other moderate pro-EU forces would likely be obliterated. As a result, the Franco-German engine will be run by unpopular lame ducks with few viable options in both Paris and Berlin, which means that both the rest of the EU member states as well as external players like the United States, China and Russia will conclude that little of what Paris and Berlin say or do in 2025 will still be valid in 2026 or 2027.
The Consequences of Fragmentation
The weakening of the Franco-German engine will have considerable consequences for the European Union. The first and most obvious of them is that no major policy reforms will take place in 2025. Issues like the completion of the EU banking union to better prepare the bloc for banking crises, the implementation of a capital markets union to increase financing options for private businesses and individuals, or substantial progress in the negotiations to accept new member states will see little to no progress in 2025. This will leave the EU ill-equipped to handle future crises, such as banking disruptions or financial instability (which are unlikely but not impossible in places like Italy or France). Furthermore, the lack of progress on EU enlargement will continue to undermine the bloc's influence in the Western Balkans, leaving a vacuum that other powers, like Russia and China, will exploit.
The EU inability to move forward with structural economic reforms in 2025 will also slow efforts to create a more unified, competitive European economy, leaving it further behind in technological innovation and industrial competitiveness against global rivals like the United States and China. In the meantime, France and Germany's inability to coordinate on expanding the EU defense and security policies will slow EU efforts to build its defense capabilities, such as the European Defense Fund and broader security cooperation. This will prolong EU reliance on NATO for its security, weakening its ambitions to achieve strategic autonomy in defense matters.
The European Commission, the bloc's executive arm, will try to use this power vacuum to its advantage and promote its views on those policy areas that are either the exclusive prerogative of the commission or are hard for member states to block. This includes trade, competition, and the functioning of the EU internal market. Brussels will have the tools to retaliate against the United States in the case of an intensification of the U.S.-EU trade war (which is likely if former President Donald Trump is reelected) and keep in place the new tariffs on Chinese electric vehicles if Brussels and Beijing fail to reach an agreement on the issue. Brussels will also have the room to soften the rules on the merger of large European companies to make the bloc better prepared to compete with their U.S. and Chinese competitors and to continue steering public funds toward the kinds of infrastructure, defense and technology projects in line with its view for the future of the bloc.
This will, however, be a reactive European Commission. Being able to react to global events is not the same thing as being able to shape or influence those events according to one's strategic goals, and the commission's steps in 2025 will be largely limited to tactical decisions. While the balance of power within the European Union will somewhat shift toward the commission next year, without strong backing from member states there is little that Brussels can do on the global stage.
With Germany and France prioritizing domestic issues and finding it harder to agree on EU policy, the bloc's position in global geopolitics will likely weaken. The United States — and especially under a Trump presidency — will see this as an opportunity to press for more advantageous trade deals or push the European Union to align more closely with U.S. foreign policy. Russia will exploit the EU lack of cohesion to further its influence in the Balkans and the Caucasus, make progress in the war in Ukraine, and continue its destabilization and sabotage efforts across Europe. China, on the other hand, is likely to intensify efforts to deepen divisions within the European Union, seeking to forge bilateral economic relationships with individual member states, thus undermining collective EU trade and foreign policy. The Franco-German partnership has historically been a pillar of EU integration, stability and policy guidance. With both nations looking inward in 2025, the European Union will be deprived of its central leadership, leaving the bloc without clear strategic direction or decisive policymaking.
