German economists warn AfD victory in Saxony-Anhalt could deter skilled workers

The AfD swept to power in Saxony-Anhalt with a margin so decisive that calling it a landslide understates the shift. The Christian Democrats, who had governed the eastern German state, saw their support cut roughly in half. Other parties trailed far behind. For many observers, the result marked a turning point in postwar German politics—and economists are bracing for the fallout.

The immediate question is whether a state government led by the AfD, a party classified as far-right extremist in some quarters, can actually reshape the economy in ways that matter. Commerzbank economist Ralph Solveen offered a measured view: most major decisions on taxes, labor markets, and social security flow from Berlin, not the state capitals. An AfD-led Saxony-Anhalt government would find itself isolated in the Bundesrat, the upper house where states have voice, and many of its pledges would likely go nowhere. Still, Solveen acknowledged the symbolic weight. "A state government led by the AfD would certainly be seen by many as a turning point," he said, though he counseled patience—things rarely unfold as grimly as they first appear.

Yet the party's internal contradictions hint at unpredictability. Two months before the election, a local AfD politician and mayor in Raguhn-Jessnitz had pushed for six new wind turbines, a position at odds with his party's official stance. Whether this signals genuine pluralism within the AfD or mere local pragmatism remains unclear. Either way, it is not reassuring business leaders.

The real alarm centers on immigration. The AfD campaigned hard on limiting foreigners, but Michael Berlemann, director of the Hamburg Institute of International Economics, was blunt about the limits of state power: "A large part of the measures it has promised cannot be implemented at the state level because the federal government is responsible for them. Another part would be illegal and would be overturned by the courts after some delay." The AfD cannot unilaterally restrict skilled worker immigration in Saxony-Anhalt. But Carsten Brzeski, chief economist at ING, pointed to something harder to measure and harder to reverse: the symbolic effect. "As with Trump, such headlines would act as a deterrent for foreign skilled workers," he said. Wido Geis-Thöne, an economist at the German Economic Institute in Cologne, agreed. Even if nothing legally changes for migrants, the state's anti-immigration posture would make Saxony-Anhalt "significantly less attractive a destination for foreign skilled workers."

The damage, economists warn, would fall hardest on Saxony-Anhalt itself. Berlemann spelled out the sectors most vulnerable: health care and nursing, hospitality and tourism, food production, agriculture, construction, and logistics—all fields already starved for workers. Pushing away the foreign talent these industries depend on would deepen the skilled worker shortage and widen the economic gap between the state and the rest of Germany. Ralf Wintergerst, president of Bitkom, the digital industry association, made the broader case: "The digital economy thrives on openness, diversity and international cooperation. Companies invest where they find good conditions and where skilled workers from Germany and abroad are welcomed."

On foreign investment, Brzeski offered a note of caution: Saxony-Anhalt is not the whole German economy, and investors may shrug off one state's political turn. But Marcel Fratzscher, president of the German Institute for Economic Research, painted a darker picture. Regardless of who leads the state government, the polarization and weakness on display would likely accelerate the departure of people and companies from Saxony-Anhalt. The real problem, he argued, was not the state election itself but what it revealed: a vote of no confidence in the federal government. Berlin must respond not with paralysis but with sweeping structural reforms—on subsidies, bureaucracy, taxes, social security, and Europe.

Tanja Gönner, managing director of the Federation of German Industries, echoed the call. The federal government must show it can act decisively on competitiveness and growth. "The response to this state election result must not be political paralysis at the federal level," she said. The political center, she insisted, must prove it can deliver—not be distracted by a single state result, but use it as a signal to move faster on the reforms that might restore confidence and halt the drift of people and investment eastward.