The economy can hope that its most fervent wish will be fulfilled after the general election – a new government that is capable of acting quickly. Not only have necessary reforms been left undone in three years of constant bickering between the members of the traffic light (Ampel) coalition government, but Germany has also been in recession for three years.

CDU leader and election winner Friedrich Merz is pressing ahead with the formation of a government. The coalition agreement should be negotiated, and the new government formed, by Easter.

Speed is necessary. The new federal government must solve the problems at hand quickly. Not only do voters expect this, but it is also a life insurance policy for the political protagonists of the centre. After the general election, a new seriousness has therefore entered Berlin politics for good reason. The strengthening of the AfD and the left, on the political fringes, is warning enough of the need to once again pursue effective policies – taking away the ground from underneath the feet of protest voters. No centrist party can rejoice. In the election results, the SPD, Greens and FDP have paid a bitter price for their poor governing. And The CDU/CSU's election victory was a weak one.

Under its new leadership, the SPD is ready to talk about a black-red alliance. It will not turn its back on a coalition if the conditions are right. This has not always been the case, and is a good signal. A streamlined coalition agreement, as Merz is aiming for, has advantages. It is quicker to negotiate, leaves little room for platitudes, and is more flexible throughout a legislative period. However, this also requires trust and goodwill on the part of all those involved to ensure that an alliance remains stable in the long term.

High energy prices and excessive bureaucracy are the most pressing problems for the economy. Russia's invasion of Ukraine has played its part in Germany's misery, but the lack of cheap Russian gas is not the only cause. The high prices are also the result of a half-baked transformation policy on the road to climate neutrality. The burdensome bureaucracy and complicated authorisation procedures that many companies complain about are home-made. The good news is that quick remedies are possible. Investments in ailing public infrastructure are just as necessary as the financing of new defence requirements, now that Europe really must ensure its own security. The Trump administration in the USA is unequivocal on this.

With these major tasks, the new German government will also be faced with enormous expenditures. We are talking about three-digit billion sums. There are already discussions as to whether the existing Bundestag might reform the debt brake, or double the special funds for the Bundeswehr. In the newly elected Bundestag, which will be constituted in the last week of March, the AfD and the Left Party (Die Linke) have just over a third of the votes. With this blocking minority, they can stop amendments to the Basic Law. The Left Party has already hinted at this. It is in favour of disarmament. It will not support rearmament.

A reform of the complex debt brake within the financial constitution is unlikely in such a short space of time. So far there have been numerous proposals, but no firm concept. The Bundeswehr special fund in the defence section, i.e. in a completely different place in the Basic Law, could be changed quite easily. The structure is in place. Only the amount would have to be increased. In both cases of an amendment to the Basic Law, a legislative procedure going up to the Bundesrat would be necessary. If the new government were to create financial room for manoeuvre in this way, it could be an efficient way to proceed.

However, the CDU/CSU, which is insisting on financial clarity and a cash balance to draw up the outstanding budget for the current year, would have a credibility problem. It has so far rejected solutions that primarily rely on new debt. If an outgoing Bundestag were to take financial decisions of this dimension, this would give new fuel to doubters of democracy.