German Chancellor Angela Merkel announced Monday that she would step down as the head of the conservative Christian Democratic Union (CDU) in December and would not seek re-election as Chancellor in 2021.

The move follows massive losses for the CDU and its partner in the Grand Coalition government, the Social Democratic Party (SPD), in this weekend’s election in Hesse. The coalition parties lost more than 22 percentage points: the CDU 11.3 percent and the SPD 9.8 percent.

But Merkel has made clear that despite mounting popular opposition to the government’s right-wing policies, the grand coalition will only intensify its policies of military rearmament, police-state buildup, and ties to the extreme right.

After three devastating election defeats—on the federal level a year ago, in Bavaria two weeks ago and now in Hesse—and after several major demonstrations against her right-wing policies, the Chancellor has made it clear that there will neither be new elections nor political concessions to mounting left-wing sentiment.

Her resignation from the party presidency serves to reorganize and reposition the party leadership in order to push ahead with the policies of militarism, internal armament and social dismantling laid down in the coalition agreement, against the declared will and massive resistance of the working population.

Although Merkel has announced her gradual withdrawal from all political offices, she wants to ensure that no concessions are made to voter pressure and mass protests. This policy is supported by the SPD, which also strictly rejects new elections. SPD leader Andrea Nahles said that she had great respect for Merkel’s decision and that she hoped that it would help to improve cooperation inside the government.

Like a dictatorial regime, the grand coalition is responding to the growing opposition and its massive rejection by the electorate by disregarding the vote. The media are supporting it by denying the real reasons for the electoral defeats—growing social opposition to militarism, austerity and reaction—and by spreading the narrative that voters turned their backs on the grand coalition because it was quarrelling instead of “implementing the coalition agreement.”

But it is precisely the content of the coalition agreement that is provoking resistance against the government—the rapprochement with the far-right Alternative for Germany (AfD), the brutal persecution of refugees, the drastic increase in military spending, the systematic build-up of the police, the continuous social austerity, the dramatic increase in rents, and the privatization of public services.

The change at the top of the CDU is in keeping with the mobilisation of extremely right-wing elements. Immediately after Merkel announced her renunciation of the party chairmanship, CDU General Secretary Annegret Kramp-Karrenbauer and Federal Health Minister Jens Spahn announced their candidacies.

Kramp-Karrenbauer is one of Merkel’s closest followers. Earlier this year, Kramp-Karrenbauer renounced the office of Saarland Prime Minister in order to take over the leadership of the CDU apparatus at Merkel’s request. She has no power of her own in the party and would only be a temporary solution.

It is different with 37-year-old Jens Spahn. Prior to his appointment as Minister of Health, he was State Secretary in the Ministry of Finance and is considered the spokesman for the conservatives in the Union, for whom Merkel’s refugee policy is not right-wing enough. Spahn to a large extent adopts the AfD programme on this issue.

Like the late far-right Dutch politician Pim Fortuyn, Spahn combines attacks on Islam and the invocation of a “dominant” German culture with a “progressive” posture on lifestyle issues. He himself is gay, and married Daniel Funke, the head of the capital office of the gossip magazine Bunte, at the end of last year.

In a typical right-wing populist manner, Spahn has repeatedly made headlines with provocations against refugees and Muslim immigrants. He demanded a ban on burqas, the abolition of the double passport, the introduction of an Islam law and cuts in benefits for refugees.

In addition to Spahn, another candidate for the CDU presidency was sent into the race yesterday by the Bild newspaper, Handelsblatt and Die Welt—Friedrich Merz. Merz was ousted from the chairmanship of the Union parliamentary faction 14 years ago by Angela Merkel when she, as party leader, claimed the parliamentary leadership as well. A short time later Merz left the political stage and made a career and a fortune as a businessman. However, he always remained in close contact with the right wing of the CDU and the party’s business wing.

Even as faction leader, Merz represented a firm right-wing course. He was the first to call for a German “dominant culture” to which immigrants would have to adapt. Representatives of immigrant organizations and Jewish associations sharply attacked Merz at the time and described him as a political arsonist who stirred up xenophobic sentiments.

After the financial crisis in 2008, Merz was commissioned by the Soffin bank rescue fund to organise the sale of the public bank WestLB to a private investor. Later, it became known that he collected fees of 5,000 euros per day for the transactions. He subsequently leveraged his relationships with various banks and financial institutions to become CEO of BlackRock Germany.

The US company BlackRock is the largest asset manager in the world, managing more than 5.5 trillion euros in assets. BlackRock has a stake in all DAX companies and exerts enormous economic power. With Spahn or Merz as party leaders, the CDU would greatly accelerate its right-wing development and move towards government cooperation with the AfD.

The business wing of the Union was not alone in its enthusiasm for Merkel’s withdrawal. AfD leader Alexander Gauland also praised Friedrich Merz. He called him a proven economic expert with great political experience.

At a press conference, Gauland said that the AfD had always demanded that Merkel leave. The fact that she was now going “halfway” was above all a success for the AfD. The “other half of her retreat” must now also take place soon, and then many other developments could follow, “which are in our interest,” Gauland added.

FDP leader Christian Lindner, who holds business-friendly and right-wing positions similar to those of Merz, also announced his willingness to form a coalition with the CDU if someone other than Merkel becomes chancellor.

It is becoming increasingly clear that the Grand Coalition is paving the way for extremely right-wing forces that hold openly fascist positions.

The SPD, the Left Party and the Greens do nothing to oppose this lurch to the right, but are part of this rapid right-wing development. Numerous SPD functionaries paid respect to Merkel, and the Greens praised the CDU leader effusively. Merkel was “the first woman in this very male-dominated shop” to take over the party leadership and hold this position for 18 years. This shows political strength and deserves respect, said Green Party leader Annalena Baerbock.

In order to stop this right-wing development, the growing opposition to the government needs a socialist perspective and an international program. The Socialist Equality Party (SGP) renews its call for an end to the grand coalition and new elections. These elections must become the starting point for an independent mobilization of the working class for a socialist program.