(BFM Stock Exchange) – The Germans are called to the polls this Sunday, February 23, as part of federal elections which must lead to a new government. The design offices hope that an executive more open to expenses and growth will serve as a catalyst on the German scholarship.

Just under a year after the French, the Germans will go to the polling stations this Sunday, February 23, as part of the federal elections.

As a reminder, this ballot follows the disintegration of the tripartite coalition in power which brought together the SPD (socialists), environmentalists and liberals (FDP), what is also called the “Tricolore fire” coalition.

The end of this alliance precipitated these German elections, which were initially planned in September 2025. So much the better in the eyes of Oddo BHF. “It’s seven months of won to get out of immobility,” said the broker.

Note that the German legislative elections operate largely in proportional. However, a party must cross a 5% threshold of the votes to be represented at the Bundestag, the lower room of the German Parliament.

With this voting system, no party can really claim to govern alone. This is the reason why German governments take on the form of coalitions determined each time after long periods of negotiation. On average, the parties put, after the elections, 70 days to agree on these coalitions, notes Oddo BHF. With a 171 -day record (almost six months) in 2017.

>> Access our exclusive graphic analyzes, and enter into the confidence of the trading portfolio

The German Chancelle economy

Due to this configuration, the risk of seeing a far -right party (such as AFD) accessing power is lower in Germany than in other European countries.

Recent polls place the CDU/CSU (Conservatives) in front of AFD, SPD and environmentalists. The most plausible scenario remains a victory of the CDU/CSU which would then be combined, either in the SPD to reform a “big koalition” (which brings together the two major historic parties), either with environmentalists or with both.

These elections arise, above all, when the first European economy suffers. Germany has now gone from the status of a large engine of the growth of the euro zone to that of brake. Its gross domestic product (GDP) contracted by 0.2% in 2024 after having already fallen by 0.3% in 2023. For 2025, the German government recently revised its growth forecast to 0.3% against 1 , 1% previously.

Symbol of German industrial superiority of yesteryear, the automobile is particularly hard. Volkswagen announced 35,000 job cuts in December. And all German car manufacturers saw their action clearly fall on the stock market last year.

It would be wrong to isolate a unique factor to try to understand this German economic decline. But the slightest commercial outlets to China and the country’s dependence on Russian gas – the war in Ukraine has led Germany to find more expensive alternatives – constitute sources of explanation.

“Schuldenbremse”

This difficult pass for the German economy led observers to wonder if Germany will not eventually loosen the budget vice to stimulate its growth. “For the markets, the stake lies in the possible modification of the debt brake, established in the Constitution,” said AM.

This debt brake (Schuldenbremse) was introduced into the German Constitution in 2009 after the financial crisis of 2008. This rule limits the structural deficit of the German federal state to 0.35% of GDP and 0% in the Länders (regions) German. This budget safeguard can be suspended in an emergency, as during the pandemic. The surplus deficit must then be absorbed when the activity leaves.

“From now on, orthodox voices like the Bundesbank (the German National Central Bank, Editor’s note) or the Council of Sages (a circle of influential economists, note) judge that this brake must be relaxed, when others would likely Get rid, “underline Oddo BHF.

“An adjustment of the debt brake would be a positive catalyst if investments in the infrastructure were to follow,” said Vincenzo Vedda, director of investments at DWS.

If questions about the future of this emerging brake, the positioning of all political parties on this subject is not clear. The SPD indicated that it wanted to reform this brake, whether at the federal level or Länder, with more flexibility on the exceptions required to suspend it (especially in terms of military expenditure), notes Barclays. Ecologists are on the same line.

Barclays and Oddo BHF note, on the other hand, that the CDU/CSU has “vague” or even “ambiguous” positions on the future of this brake.

“In the end, the parliamentary arithmetic to reform the controversial debt of Germany could be very tight,” judges the Nomura bank.

“In most parties, there is the desire to restore flexibility to fiscal policy but except sudden and complete reversal of the CDU, we must not count on a change in budgetary paradigm. A large Keynesian recovery plan n ‘is not on the agenda in Germany, “explains Oddo BHF.

A catalyst?

Can the German elections nevertheless bring an accelerator to the Frankfurt Stock Exchange?

“We continue to think that the next German elections can lead to a policy more favorable to the market in Germany, whether through tax reductions, an increase in tax expenditure or a redefinition of the priority of expenses of expenses Budgets in favor of investments “, judge Deutsche Bank.

The German bank lists the German elections among the elements likely to help European indices to continue to outperform Wall Street. This even if, in the very short term, the procrastination on the formation of a government coalition could weigh on market confidence, she notes.

Since the start of the year, the Dax 40 has repelled its records several times. The index takes 12% over the whole of 2025, and 28% over a year. An increase which is part of a more general movement of rebound in European markets (CAC 40 takes 10.5%) and outperformance compared to American actions.

As we explained in a previous article, the Dax 40 does not really suffer from the deterioration of the German situation because its 40 residents are globalized companies and ultimately not very exposed to their domestic economy, such as SAP, Adidas or Allianz.

But if these 40 values ​​make (generally) FI of the German situation, it is much less true for the lower capitalizations of the Frankfurt Stock Exchange. The MDAX, an average capitalization index of the German square, earned only 5.8% over a year, underperforming more than 22 percentage points on the Dax 40.

Barclays is confident. “The elections arouse optimism in the German equity markets,” she wrote in a recent note. The British establishment believes that the ballot will constitute a catalyst for the Frankfurt Stock Exchange. This because in one way or another, almost all of the parties are aware of the urgency to take measures to energize growth.

Customs surcharges as a spoilsport

“Nature favorable to the growth of expected policies could help strengthen the feeling of investors with regard to large capitalizations behind cyclic and medium capitalizations, in our opinion,” says Barclays.

“Although we lack details on the real magnitude of a possible fiscal boost, the nature of the potential reforms on the side of the offer and the sources of funding, we think that a change in policy Favorable to growth could still contribute to reviving the interest of global investors who have disengaged from German actions and, more broadly, European since 2012, “added the British bank.

Capital Economics is much less optimistic. The think tank expects German actions to underline those of the developed markets this year, because German companies are very exposed “to protectionism which seems to rise in power”. Particularly with customs surcharge which is envisaged by the Trump administration.

According to the German Institute IW, US universal US customs from 10% coupled at a rate of 60% for China alone would punctuate German GDP of 0.3 point in the first year, 0.9 point the second and 1.2 point the third.

This impact of customs surcharge “will probably be much more important than the result of the next federal elections”, Capital Economics argues.

Certainly these elections could lead to a better business climate for companies. But “we doubt, however, that this is enough to give a ‘boost’ to the German market”, decides the think tank.