Despite coalition frictions and Merz’s historically low approval ratings after one year in office, recent cabinet agreements on the 2027 federal budget and a health-system overhaul have reinforced expectations that the CDU-SPD government will endure through at least the end of 2026. Traders assign roughly a 78.5 percent implied probability that Merz remains chancellor before 2027, reflecting the absence of any immediate no-confidence mechanism, the narrow parliamentary majority’s demonstrated capacity to pass contested legislation, and the lack of viable alternatives ahead of scheduled state elections. While AfD polling gains and public discontent over economic performance create ongoing pressure, historical precedent favors incumbents completing full terms absent a formal collapse of the coalition or snap-election trigger.