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In the small eastern German town of Moeser, a campaign event for the far-right Alternative for Germany (AfD) carried the buzz of what the party itself frames as a once-in-a-generation political turning point. This Sunday’s state legislative election in Saxony-Anhalt stands on the cusp of rewriting modern German political history: if current polling holds, it could deliver the country its first far-right state governor since the end of World War II, sending shockwaves through national politics and testing long-held taboos surrounding radical right-wing governance.

Multiple pre-election surveys place the AfD, an anti-immigration party founded just 13 years ago, with a substantial lead over the incumbent center-right Christian Democratic Union (CDU), which has held uninterrupted control of Saxony-Anhalt’s state government since 2002. For the AfD, capturing the governor’s mansion and leading a state administration would mark the most significant milestone in the party’s history, a symbolic and political blow to Chancellor Friedrich Merz and his embattled national government, which is currently grappling with widespread public discontent over a stagnant national economy.

Political analysts warn that an AfD-led state government would break a long-standing taboo that has set Germany apart from many of its European neighbors in the postwar era. “If AfD wins the election and forms the government, that would be kind of breaking a taboo in Germany,” explained Wolfgang Merkel, a political science professor at Berlin’s WBZ Social Science Center. He noted that modern Germany has long remained an exception across the continent, with no radical right-wing party ever holding governing power at the national, state, or major municipal level to date.

The AfD’s rise has been fueled by growing voter frustration with mainstream parties, amplified by a stagnant national economy that has left Merz’s administration struggling to build public confidence. In last year’s national election, the AfD notched the strongest postwar result ever recorded by a German far-right party, taking 20.8% of the national vote to claim the position of Germany’s largest official opposition party. Its support has long been concentrated in Germany’s former communist eastern states, including Saxony-Anhalt, and the party has expanded its appeal by capitalizing on voter anger across a range of issues beyond its core signature policy of curbing immigration.

In Saxony-Anhalt, the AfD is targeting an absolute majority in the state legislature – a result that would break the so-called “firewall” maintained by all mainstream German parties, which have refused to enter into any governing coalition or cooperation with the AfD. Saxony-Anhalt’s AfD regional branch is one of several party wings classified as a proven right-wing extremist organization by Germany’s domestic intelligence service, a label the party forcefully rejects.

“This is a historic opportunity that we have here in Saxony-Anhalt,” AfD gubernatorial candidate Ulrich Siegmund, a charismatic 35-year-old, told the Associated Press at his Moeser campaign event, where supporters gathered over beer and sausages to meet the candidate. “We will write history here.”

Siegmund’s policy agenda centers on hardline immigration measures: he has called for a widespread deportation offensive targeting people living in Germany illegally, and pledged to cut social welfare incentives that he claims attract migrants to exploit Germany’s social system. He has also proposed launching a multi-year process to withdraw Saxony-Anhalt from the regional public broadcasting consortium, citing unsubstantiated claims of widespread disinformation from the network. Other key policy priorities include legalizing home schooling – currently banned across Germany – banning official rainbow flag displays in public schools, mandating that only the German national flag be flown, ending German financial support for Ukraine, and pushing to lift international sanctions against Russia (though the latter two policies fall under federal, not state, jurisdiction).

For the AfD, governing Saxony-Anhalt would represent a massive step up from its only previous local executive win: the party captured a single county administration in neighboring Thuringia in 2023. Holding a state governorship would supercharge the party’s long-term ambition of making further electoral gains and eventually winning control of the national government. German states hold extensive policymaking authority, including oversight of public security and the entire state education system, giving an AfD-led administration substantial room to implement its policy agenda.

Addressing concerns about his party’s extremist labeling, Siegmund sought to reassure voters: “No one here needs to be afraid, quite the contrary. Every honest person in Saxony-Anhalt will benefit from an AfD-led government.”

Incumbent CDU Governor Sven Schulze, Siegmund’s main challenger, warned that an AfD government would push Saxony-Anhalt into political isolation and reverse decades of progress the state has made since German reunification in 1990. The state, which is home to 2.1 million of Germany’s 83.5 million people and counts among Germany’s least prosperous regions, has seen steady economic growth and falling unemployment under CDU leadership, Schulze argued.

He added that the AfD’s hardline anti-immigration stance would devastate the state’s economy: “The far right effectively doesn’t want to have anyone here who was born abroad and lives and works here. With many immigrants working in hospitals and companies, for example, that would be a huge problem for Saxony-Anhalt.” Schulze, who has reiterated that the CDU will never enter into a coalition with the AfD, criticized the party for only highlighting voter grievances without offering actionable solutions.

Even if the AfD wins a plurality of seats, its path to forming a government remains uncertain. If the party fails to secure an absolute majority, political analyst Wolfgang Merkel notes, there are no viable mainstream coalition partners willing to work with it, leaving the AfD locked out of power. In that scenario, Schulze would likely attempt to assemble a minority or multi-party coalition with smaller left-of-center parties, a move that would likely draw accusations from the AfD that mainstream parties are clinging to power against the popular will.

The outcome of Sunday’s election carries major implications for Merz’s national government, which is already fighting to overcome low approval ratings and shake off what Merz calls “widespread moroseness” gripping the electorate. Additional poor results for the CDU and its coalition partner, the center-left Social Democrats, in September 1 elections in Berlin and another eastern state, Mecklenburg-Western Pomerania, could amplify the pressure on Merz’s administration.

While Merkel argues that Saxony-Anhalt’s small size means it is unlikely to trigger immediate national political upheaval, a strong AfD win would reinforce the growing narrative that Germany’s traditional mainstream large parties are in long-term decline. Merz’s government has staked its credibility on delivering sweeping economic and political reforms, but so far has failed to produce visible, high-profile wins to win over voters. “When the economy isn’t running, basically all areas of politics are infected,” Merkel noted.

After a recent cabinet meeting last week, Merz struck an optimistic tone, emphasizing his government’s commitment to pushing through its reform agenda. “We must get out of this climate of glumness and anger,” he said. “Together, we must shake off this widespread moroseness that has long paralyzed our country.”

ASHEVILLE, North Carolina — The annual Group of 20 (G20) finance ministers’ summit kicked off in this mountain city on Monday, bringing top financial leaders from the world’s largest economies together at a moment of deep global geopolitical and economic tension, driven by U.S. policy shifts that have upended international order.

U.S. Treasury Secretary Scott Bessent opened the gathering by laying out the Biden (Trump) administration’s core priorities: fostering broad-based global economic expansion and reining in the fast-growing sovereign debt that has burdened developing and advanced economies alike. But the summit convenes against a volatile backdrop: renewed U.S.-Iran hostilities that have kept global gasoline prices elevated for consumers worldwide, and a sharp spike in trade tensions with Canada after high-stakes negotiations collapsed, triggering a reciprocal escalation of tariffs between the two North American neighbors.

In an exclusive interview with the Associated Press ahead of the summit’s opening, Bessent outlined plans to ramp up economic pressure on Iran, announcing a new round of sanctions targeting an additional Iranian bank as part of what the administration has dubbed “Operation Economic Outcast.” This move follows earlier sanctions action this month that restricted the operations of an Egyptian bank with ties to Iran in the United Arab Emirates. “We are prepared to deploy financial violence if necessary to achieve our goals,” Bessent told the AP.

When pressed by reporters Monday on how quickly the Iranian economy could buckle under the mounting sanctions campaign, Bessent said a shift could come surprisingly fast: “I think it could be within weeks or months. The economy doesn’t have to fully collapse — we just need the regime to come to its senses and change course.”

Bessent claimed the European Union has offered “fulsome support” for the U.S. sanctions push, a claim backed by a recent EU statement that welcomed expanded economic pressure on Tehran and pledged to coordinate with Washington and other global partners to maintain pressure on the Iranian government.

Not all major economies have lined up behind the U.S. approach, however. French Finance Minister Roland Lescure told reporters ahead of Monday sessions that the G20 should prioritize reaching a collective, unified statement on a shared path to sustainable global growth, noting that the current global economic outlook carries significant uncertainty. “The world economy is a bit like the weather in Asheville — it’s unpredictable, it’s foggy,” Lescure observed.

The summit also drew attention for the inclusion of Russian Finance Minister Anton Siluanov, who held a one-on-one bilateral meeting with Bessent on the summit’s sidelines Monday. Critics, particularly from European capitals, have pushed back against allowing Russia to retain its G20 membership amid the ongoing war in Ukraine, but former President Donald Trump defended the decision. “We like getting along with everybody,” Trump told reporters when asked about the invitation. The U.S. Treasury Department has not yet issued additional comment on the meeting.

Against this fractured geopolitical backdrop, analysts warn that the U.S. may struggle to rally unified support from its traditional allies for its dual agenda on Iran and trade. Daniel Fried, a former assistant secretary of state for European affairs during the George W. Bush administration, noted that recent U.S. policy moves have alienated many long-standing partners. “The U.S. may find it difficult to rally its usual friends and allies under the current circumstances,” Fried said. For the administration to secure broad international buy-in, he added, it will need to “take greater care in consulting with allies and partners than the U.S. has shown in recent months.”

Bessent is pushing for global cooperation to isolate Iran economically, as the U.S.-led confrontation with Tehran enters its seventh month. While the U.S. conducted another strike against Iranian targets over the weekend, the administration has emphasized it prefers economic pressure over large-scale military action to force policy changes from the Iranian government. To date, the White House has not followed through on earlier threats of an “economic D-Day” that would impose sweeping secondary sanctions on all entities trading with Iran, instead relying primarily on targeted warnings to Iran’s global trading partners.

The biggest hurdle to the U.S. sanctions campaign remains China, which is the world’s largest importer of Iranian crude oil. When asked if the administration would impose sanctions on Chinese entities for continuing to purchase Iranian oil, Bessent told the AP that “all options are on the table.”

He rejected widespread claims that the administration is reluctant to confront Beijing over the issue, calling the perception “a completely false narrative.” Bessent insisted that Washington and Beijing share core goals: reopening the strategic Strait of Hormuz to unimpeded global oil trade and preventing Iran from developing a nuclear weapon.

But Nicholas Mulder, a Cornell University historian specializing in the history of economic sanctions, warns that designating major Chinese financial institutions for sanctions would carry severe global economic risks. “We might see a gradual trickle of smaller listings, but a large designation of, say, a major Chinese bank would cause serious upheaval and prompt retaliation from Beijing,” Mulder explained.

Mulder also noted that disrupting global oil flows through secondary sanctions would add new upward pressure on global inflation, forcing the U.S. Federal Reserve to continue raising interest rates to cool price growth. “Given that Bessent’s Treasury already finds itself having to quell a growing unease in the bond markets, it will be very challenging to enforce aggressive secondary sanctions with credibility,” Mulder said.

Beyond geopolitics and sanctions, the summit’s host city carries its own symbolic weight. Asheville is still recovering from the devastation of Hurricane Helene, which swept through the Southeast in September 2024, killing more than 250 people and causing nearly $80 billion in damage across a swath of the U.S. from Florida to the Carolinas. The city’s progress in rebuilding after the storm offers a model for what collective action can achieve, Bessent argued.

Outlining his economic growth agenda for the summit, Bessent said the U.S. will push for global policy alignment on deregulation and energy independence, alongside discussions of persistent global economic imbalances, updated banking regulations, and sovereign debt restructuring for vulnerable developing economies. “The world has this mountain of debt, and we do have to grow our way out of it,” Bessent told the AP.