Despite recent coalition tensions over pension, care, and tax reforms—including disputes on a proposed sugar tax and Pflege system changes that prompted Bundespräsident Steinmeier to mediate on October 1—the CDU/CSU-SPD government under Chancellor Friedrich Merz shows strong incentives to persist. State election losses in September 2026 weakened both partners and boosted the AfD, leading leaders on both sides to warn that an early breakup risks further fragmentation or snap elections favoring extremes. Public commitments to stability, a narrow parliamentary majority, and the next regular Bundestag vote in 2029 reinforce trader expectations that internal disputes will be managed through compromise rather than rupture before 2027.