Friedrich Merz is the man breaking Germany’s postwar taboos. 

For half a century, the now German chancellor personified his country’s conservative orthodoxy: a Christian Democrat devoted to balanced budgets and ready to trust Washington to keep the peace. Now, with war on the continent and Germany’s economy sputtering, Merz has rewritten the script: spending big, rearming fast and declaring that Berlin — and the rest of Europe — must be ready to stand on its own. 

His move last March to unleash hundreds of billions of euros in borrowing for infrastructure and defense marked one of the most radical breaks in modern German fiscal policy — and one of the fastest. With just two weeks left in the outgoing parliament, Merz rammed through a spending package that shredded decades of debt-averse orthodoxy. 

Just as dramatic has been his shift on foreign policy. Washington’s transformation from indispensable friend to unpredictable frenemy reportedly shook Merz, 70 — once described in these pages as Germany’s most American chancellor. His career includes a decade in the private sector, most noticeably with the U.S. asset manager BlackRock. That didn’t stop him, on the very day he won the chancellery, from declaring that Europe must “achieve independence from the USA.” 

Merz’s allies describe him as a risk-taker. And he hasn’t hesitated to push for ambitious economic reforms at home or to signal he’s ready to break with his country’s traditional tread-softly approach to Moscow by endorsing a plan to seize billions of euros in frozen Russian assets to fund a massive loan to Ukraine. 

His boldness, however, hasn’t translated into popularity. Six months in, the far-right Alternative for Germany overtook Merz’s conservatives in national polls for the first time since its creation. His grand coalition — a marriage of Christian Democrats and center-left Social Democrats — is feeling the heat, particularly on the economy.  

U.S. President Donald Trump’s tariffs, high energy prices and growing competition from China are squeezing the industrial base that has long made Germany the envy of its neighbors. Meanwhile, Merz’s “autumn of reforms” — intended to reboot the economy — has become bogged down by political reality, with his slim parliamentary majority struggling to pass some of his more ambitious measures. 

Still, the chancellor’s position remains stronger than that of most of his peers. While France’s Emmanuel Macron and Britain’s Keir Starmer wrestle with debt and fractious parliaments, Merz presides over a country with healthier finances. That gives him room to maneuver. He can afford to take a bit more time to, say, craft a sustainable pension reform that’s also politically plausible.  

While domestic troubles take up much of his bandwidth, Merz has begun flexing his muscles in Brussels — where Germany’s word still carries decisive weight. To the delight of Europe’s so-called frugal states, he has drawn clear red lines against the European Commission’s push to expand the EU’s long-term budget, casting himself as the guardian of fiscal and institutional discipline. 

That stance underscores Berlin’s growing influence in Europe’s power corridors. The German chancellor has become a central player in the EU’s debate over how far — and how fast — the bloc should move in integrating its defense, cutting its red tape and putting its fiscal house in order. But his ability to lead abroad depends on results at home: He can only credibly shape Europe’s future if he can restore confidence in Germany’s own economic engine — which sometimes means reining Brussels in as much as pushing it forward. 

“Friedrich Merz is realizing that he is needed as a foreign policy chancellor because Europe must strengthen its presence on the geopolitical stage,” said Sudha David-Wilp, a Berlin-based senior fellow at the German Marshall Fund. “But he’s going to be measured by delivering domestically.” 

Merz’s staff picks leave little doubt about his intention to make his presence felt in Brussels — and to keep his foreign policy insulated from domestic turbulence. 

He has broken with German tradition by naming a fellow Christian Democrat, Johann Wadephul, as foreign minister — a portfolio usually handed to junior coalition partners. The choice is widely seen as a bid to reduce internal friction and ensure Berlin’s diplomacy runs directly through the chancellery. Merz has also installed his powerful chief of staff, Jacob Schrot, as head of a newly created National Security Council, tasked with coordinating Germany’s sprawling security apparatus and enforcing a single message on defense and foreign policy. 

Europe’s leaders are watching closely —  and they know one thing for certain: There aren’t many other contenders for Europe’s next natural leader. 

Check out the full POLITICO 28: Class of 2026, and read the Letter from the Editors for an explanation of the thinking behind the ranking.