The AfD's Economic Populism Could Hardly Be Shallower

It took less than an hour. No sooner had it become clear, this Sunday, that the Alternative für Deutschland (AfD) was by far the strongest party in Saxony-Anhalt than Elon Musk offered his congratulations on X. The nationalist party’s lead candidate, Ulrich Siegmund, replied immediately, in English, offering “strong and constructive cooperation” and promising that, under AfD leadership, Germany would once again become “a place worth investing in.”

This is the first time that a state chapter of the party, which the Office for the Protection of the Constitution classifies as “confirmed far-right extremist,” has actually won a state. The exchange on X marked the latest in a string of public overtures between the world’s richest man and the AfD.

This episode warrants closer examination, because it raises a question that is often overlooked in the German debate: What is the AfD’s actual stance on capital? The answer is more contradictory than the image of the tech-savvy billionaire and his new political ally might suggest.

The actual reason for the AfD’s founding in 2013 was not immigration policy, but opposition to the euro rescue policy (the European Stability Mechanism and financial aid to Greece). Given the backgrounds of its founders, early on the free-market AfD was dubbed the “professors’ party.” Of the fifty-eight founders who signed the founding manifesto of the “Alternative,” not one had a background in eastern Germany, where it today boasts its strongest support.

The party’s focus shifted, at the latest, with Chancellor Angela Merkel’s refugee policy in 2015. One of its leaders, Alexander Gauland, called the arrival of about one million refugees from the Syrian civil war a “gift from God” for the AfD. After the chancellor stated in a television interview in October 2015 that Germany’s borders could no longer be secured as they had been in the past, the party, which had earlier been written off, surged to 10 percent in the polls by that December. Since then, the AfD has defined its economic policy primarily as opposition to labor migration to Germany.

With the former radical free-market wing centered around founding figures like Bernd Lucke long having left the AfD, its initial policies have been replaced by a mix of nationalist-protectionist rhetoric and selective welfare measures specifically targeting voters who feel left behind by globalization. Yet the party also remains attractive to energy-intensive small and medium-sized businesses, particularly in eastern Germany, for its rejection of climate policy and EU regulation as well as its demand for cheap energy, from Russia if necessary. Large export-oriented corporations, however, which depend on open markets, reliable international supply chains, a stable European regulatory framework, and immigration, largely keep their distance.

Those who voted for the AfD in Saxony-Anhalt did widely cite economic reasons, in the broadest sense, for their voting behavior. According to election analyses, its supporters are disproportionately likely to lack a higher education degree and also to identify as working class, a pattern already evident in 2019 and 2024 in eastern states like Saxony and Brandenburg where, in some cases, over 40 percent of working-class voters cast their ballots for the AfD. This puts the east clearly ahead of the west: in Saxony-Anhalt’s September 2026 election, close to two-thirds of working-class voters backed the AfD, compared with 37 percent in Baden-Württemberg’s election that March — the party’s strongest showing yet among western workers but still well behind its eastern numbers.

What unites AfD voters in both states is the fear of no longer being able to pay their bills. In Baden-Württemberg, one of Germany’s wealthiest states, AfD voters worried more than supporters of any other party about rising prices and their own ability to pay, according to Infratest dimap data. In Saxony-Anhalt, one of its poorest, 89 percent of AfD supporters say they share this exact fear, according to a Konrad Adenauer Foundation analysis based on the same polling institute, with 80 percent additionally fearing a decline in their standard of living. The same worry, measured by the same institute, in two states with almost opposite economic profiles: this suggests it isn’t a purely east German or economically depressed phenomenon, but an anxiety that cuts across very different German geographies and economic realities.

Ulrich Siegmund and the AfD in Saxony-Anhalt understood this. The party’s manifesto promises, for instance, a “baby bonus” of up to €4,000, generous family benefits, and state support for domestic businesses, all framed around reversing what the party calls the “aging and dying out of the German people.” If one adds the government’s already-planned new annual borrowing of €877 million euros — which, according to the AfD’s own “debt freeze” pledge, would actually be out of the question — the result is an actual financing need of about €2.5 billion per year, compared with barely €243 million in verifiable savings.

Several of these promises would also collide with the German constitution long before they collide with the budget. The AfD’s baby bonus is explicitly reserved for parents holding German citizenship. Legal scholars argue that this kind of nationality-based exclusion from state benefits runs directly against the German constitution’s equal treatment guarantees.

How this pans out day-to-day if the AfD can take over the state government remains to be seen; the party simply hasn’t been in power so far. Yet the AfD’s rise in Saxony-Anhalt is forcing the Christian Democratic Union (CDU) and the rest of the democratic spectrum to make a decision they have been putting off for years: whether the “cordon sanitaire” will actually hold, or whether, as initial municipal collaborations in Thuringia already suggest, it has long since begun to crumble in practice.

Saxony-Anhalt AfD chief Siegmund is now inviting CDU lawmakers to switch to his party; he is three seats short of an absolute majority. From a self-serving perspective, this would be the best course of action for Chancellor Friedrich Merz, as it would allow him to criticize such politicians’ behavior without having made the decision himself to tear down the “firewall” against the AfD.

A government made up of all other parties now represented in the Saxony-Anhalt state parliament would have a — marginal — majority of seats but would hardly be able to pursue an effective economic policy, as the socialist Die Linke and the CDU have little in common. Here, Siegmund can now capitalize on his party’s good relationship with the richest man in the world, whom they hope to persuade to invest in the state.