{"id":58841,"date":"2026-02-20T08:38:25","date_gmt":"2026-02-20T12:38:25","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/chancellor-merz-reaffirms-firewall-against-afd-as-germany-pivots-to-conventional-defense-support-for-france\/58841\/"},"modified":"2026-02-20T08:38:25","modified_gmt":"2026-02-20T12:38:25","slug":"chancellor-merz-reaffirms-firewall-against-afd-as-germany-pivots-to-conventional-defense-support-for-france","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/chancellor-merz-reaffirms-firewall-against-afd-as-germany-pivots-to-conventional-defense-support-for-france\/58841\/","title":{"rendered":"Chancellor Merz Reaffirms &#8216;Firewall&#8217; Against AfD as Germany Pivots to Conventional Defense Support for France"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Chancellor Friedrich Merz ruled out any partnership with the far-right AfD<\/strong>, vowing to maintain a political &quot;firewall&quot; to prevent the party from &quot;ruining&quot; the country.<\/li>\n<li><strong>Germany&#39;s Defense Ministry clarified that military cooperation with France will prioritize conventional weapons<\/strong>, explicitly declining direct participation in nuclear deterrence.<\/li>\n<li><strong>Economic growth remains stagnant with a 1% GDP forecast for 2026<\/strong>, as German industry grapples with high energy costs and a &quot;tariff blitz&quot; from the United States.<\/li>\n<li><strong>Defense stocks remain in focus<\/strong> as Germany continues its multi-year &quot;Zeitenwende&quot; spending spree, benefiting major contractors like Rheinmetall (<a href=\"\/stock\/RHM\">RHM<\/a>).<\/li>\n<\/ul>\n<p>German Chancellor <strong>Friedrich Merz<\/strong> delivered a high-stakes address on Friday, February 20, 2026, at a Christian Democratic Union (CDU) party congress in Stuttgart. Merz emphatically rejected any future cooperation with the <strong>Alternative for Germany (AfD)<\/strong>, stating that the party &quot;cannot be a partner&quot; and poses a fundamental threat to the nation&#39;s stability.<\/p>\n<p>The Chancellor\u2019s comments come exactly one year after the CDU\u2019s 2025 election victory, a period marked by a <strong>limping economy<\/strong> and rising pressure from the far right. Merz is currently leading a &quot;grand coalition&quot; with the Social Democrats (SPD), but his administration faces low approval ratings amid a <strong>1% GDP growth forecast<\/strong> and ongoing trade tensions with the U.S. administration.<\/p>\n<p>On the defense front, the German Defense Minister issued a critical clarification regarding the country&#39;s strategic partnership with France. While Chancellor Merz had previously expressed openness to discussing a &quot;European nuclear umbrella,&quot; the ministry confirmed today that Germany will support France with <strong>conventional weapons<\/strong> rather than participating in nuclear deterrence.<\/p>\n<p>This cautious stance aims to uphold Germany\u2019s long-standing commitment to international non-proliferation treaties while still bolstering European security. The decision has significant implications for the European defense industry, particularly for joint projects involving Airbus (<a href=\"\/stock\/AIR\">AIR<\/a>) and the <strong>Future Combat Air System (FCAS)<\/strong>, which has faced recent budgetary and political hurdles.<\/p>\n<p>Investors are closely monitoring these developments as Germany balances its massive <strong>\u20ac500 billion defense earmark<\/strong> (2025\u20132029) against a strict domestic debt brake. Shares of Rheinmetall (<a href=\"\/stock\/RHM\">RHM<\/a>) and other defense-related entities continue to see volatility as the government navigates the transition from &quot;strategic dialogue&quot; to concrete procurement of conventional hardware.<\/p>\n<p>The political &quot;firewall&quot; reaffirmed by Merz is seen by analysts as a move to reassure international markets of Germany\u2019s continued <strong>centrist stability<\/strong>. However, with regional elections approaching and the AfD polling at approximately <strong>20%<\/strong>, the Chancellor faces an uphill battle to deliver the &quot;big-bang&quot; economic reforms demanded by business leaders to revitalize <em>Germany Inc.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Chancellor Friedrich Merz ruled out any partnership with the far-right AfD, vowing to maintain a political &quot;firewall&quot; to 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