The director of the employer‑linked German Economic Institute (IW), Michael Hüther, told the Kölner Stadt‑Anzeiger that the political centre is under considerable pressure, with the prospect of predictable, compromise‑oriented politics diminishing. He warned that the Berlin left’s call for expropriation of housing companies makes it similar to the AfD, which he described as offering unfunded social promises and advocating a euro exit. Both approaches, he said, serve populist rhetoric without solving problems and have historically led to capital flight without creating new housing.
Commerzbank’s chief economist, Jörg Krämer, argued that the demand to municipalise housing firms reveals a misunderstanding of the role of private property. DIW Berlin president Marcel Fratzscher described the election Sunday in Mecklenburg‑Vorpommern and Berlin as "another bad day for our democracy," noting that the need for three‑party coalitions will make the implementation of urgent reform programmes more difficult. He added that the federal government under Chancellor Friedrich Merz will find it harder to muster the courage and political support for a fundamental reform agenda, and that if the CDU, CSU and SPD continue to hold to their red lines, political paralysis will persist, economic weakness will continue and the chance of an AfD victory in 2029 will rise.
Berenberg’s chief economist, Holger Schmieding, characterised the election results as showing "populist protest parties" becoming the strongest political force, and said the outcomes can be read, to a degree, as a vote against the growth‑oriented reforms planned by the Merz coalition.
