Merz warns US against election interference as Trump funds European civil society

German Chancellor Friedrich Merz delivered a blunt rebuff to Washington on Wednesday, declaring that his government would not tolerate American financial intervention in European democratic processes. The intervention came in response to a US State Department funding scheme, announced on Monday, that will distribute nearly $5 million to civil society organisations across Europe under the banner of defending "Western civilisational heritage".

The funding scheme and its stated aims

The programme, first reported by the Financial Times, invites applications from organisations working to "strengthen and develop democratic resilience, rule of law, freedom of speech and freedom of the press, and the defense of human rights in Europe". Individual grants could reach $3 million. The call for proposals specifies that beneficiaries should "address national sovereignty, migration, censorship, and lawfare challenges in line with shared political philosophy, law, and our common Western civilizational heritage".

Although the State Department description does not name political parties as eligible recipients, the language mirrors talking points used by nationalist movements across the continent. The reference to "lawfare" and "censorship" echoes complaints from parties that have clashed with European Union regulations on hate speech and platform governance. The funding call explicitly criticises "supra-national institutions and governments" for using "overbroad and vague hate-speech laws and online content regulations that police and punish speech while suppressing political participation".

Merz draws a red line

Merz, speaking in Berlin, was unequivocal. "We do not interfere in American elections; we've always stuck to that," he told reporters. "Conversely, I don't want the American government or government-affiliated institutions to interfere in German elections." He added that foreign financing of political parties is illegal in Germany and said he expected "our friends around the world, in particular, will also abide by these legal rules that we have established in Germany".

The chancellor's language was deliberate. By framing the issue as a matter of legal compliance rather than diplomatic preference, he signalled that any US-funded entity channelling money to the Alternative for Germany (AfD) or its affiliated foundations would face prosecution. Germany's Party Law (Parteiengesetz) prohibits donations from non-EU foreigners and foreign states to political parties, with violations carrying fines up to three times the donated amount.

The AfD factor and the Saxony-Anhalt election

The timing is not coincidental. Saxony-Anhalt, an eastern German state, holds a regional election on 6 September. The AfD is polling first nationally at roughly 22 per cent and has a realistic prospect of leading a state government for the first time. In Saxony-Anhalt specifically, the party has consistently topped surveys since late 2024. A victory there would break the "Brandmauer", the firewall that has kept the far right out of executive power at every level since the Federal Republic's founding.

The AfD's relationship with the Trump orbit has been volatile. Early in Trump's second term, party leaders welcomed endorsements from Elon Musk and celebrated Vice President JD Vance's attack on European firewalls at the 2025 Munich Security Conference. Vance told the assembled leaders that "the threat that I worry about most is not Russia, it's not China, it's the retreat from the fundamental values shared by Europe and the United States", a line widely interpreted as support for parties the EU establishment considers extremist.

In recent months, however, AfD co-leaders Alice Weidel and Tino Chrupalla have sought distance from MAGA figures. Party strategists calculate that overt American backing could alienate voters in the former East Germany who resent external direction, even from ideological allies. The shift reflects a calculation that the September election will be decided on domestic issues, migration, energy costs, inflation, not transatlantic culture war.

Targeting the EU's digital rulebook

The State Department's funding call reads like a brief against the European Union's digital regulatory framework. The Digital Services Act (DSA), the Digital Markets Act (DMA), and the EU's Code of Practice on Disinformation have imposed content moderation obligations on platforms that US tech companies, and the US government, view as extraterritorial overreach. The funding document's complaint about "supra-national institutions" using "state power to undermine fundamental principles of democratic self-government" is a direct characterisation of the European Commission's enforcement actions against X, Meta, and TikTok.

Brussels has fined X under the DSA for failures in transparency and risk assessment. The Commission has opened formal proceedings against Meta over its "pay or consent" advertising model. These cases are viewed in Washington as political targeting of American companies. The funding scheme appears designed to build a European civil society network that will lobby against such regulations, framing them as threats to free expression rather than consumer protection.

Washington's defence and the credibility gap

A State Department spokesperson responded to Merz's remarks by stating: "The Trump administration remains committed to defending democracy and human rights around the world, including in Europe. Our programming in Europe aims to support our European allies in defending those rights and principles, along with their civilizational self-confidence and sovereignty from those who seek to undermine them." The statement did not address whether recipient organisations could be linked to the AfD or similar parties.

Senior US diplomats have previously denied interference despite documented meetings with AfD politicians. In February, a State Department delegation met AfD Bundestag members in Berlin, describing the encounter as routine engagement with elected representatives. German security services have long monitored AfD ties to Russian influence networks; the addition of American financial channels complicates an already fraught counter-intelligence picture.

European precedent and legal exposure

The European Commission has tools to respond. The Defence of Democracy package, adopted in 2024, requires transparency for interest representation funded by third countries. The Foreign Information Manipulation and Interference (FIMI) framework allows the EU to attribute and sanction covert influence operations. However, the US programme operates through overt grants, not covert channels, placing it in a grey zone where diplomatic protest is the primary recourse.

Merz's government could tighten the Association Law (Vereinsgesetz) to require disclosure of foreign government funding for any organisation engaged in political activity. Such a move would mirror the US Foreign Agents Registration Act (FARA) but would face criticism from civil liberties groups. The coalition agreement between Merz's CDU/CSU and the SPD includes a commitment to "protect democratic institutions from foreign influence" without specifying instruments.

What happens next

Applications for the State Department grants close on 15 August. Awards are expected by late September, after the Saxony-Anhalt vote but before the next round of eastern state elections in Brandenburg and Thuringia in 2026. Merz has instructed the Foreign Office to deliver a formal diplomatic note to Washington objecting to the programme. The Bundestag's interior committee will hold a hearing on foreign election interference in early September, with representatives from the Federal Office for the Protection of the Constitution (BfV) expected to testify on AfD financing structures.