Germany’s conservative leader Friedrich Merz clinched a coalition deal with the centre-left Social Democrats (SPD) co-chairs Saskia Esken and Lars Klingbeil on Wednesday, promising to steer Europe’s largest economy through mounting global challenges as he prepares to succeed Chancellor Olaf Scholz. The agreement follows weeks of intense negotiations after a snap election in February left no party with a clear majority.
Merz, head of the Christian Democratic Union (CDU), is set to take office in early May, pending final approval from SPD members in an internal vote. His ascent to the chancellery marks the end of Scholz’s troubled tenure, which was overshadowed by the economic fallout from Russia’s 2022 invasion of Ukraine and mounting discontent over his coalition’s infighting.
The new partnership between the CDU and SPD aims to restore economic stability amid fears of recession triggered by a widening global trade war, fuelled by US President Donald Trump’s sweeping tariffs. Merz, a vocal critic of Trump’s policies and sceptical of Washington’s reliability, has vowed to increase defence spending and support German businesses battling high costs and weak demand.
Under the agreement, both parties have already pushed through plans to loosen Germany’s stringent debt rules, paving the way for a major infrastructure fund to revive growth. The deal also signals a tougher stance on migration, as Merz seeks to tighten controls after what he described as the overly liberal policies of former chancellor Angela Merkel during the 2015 refugee crisis.
The coalition holds 328 of the Bundestag’s 630 seats, offering a stable majority despite declining support for traditional parties. February’s early election — called after Scholz’s coalition collapsed in November — saw Merz’s bloc win the most seats but fall short of an outright majority, while the far-right Alternative for Germany (AfD) surged to second place.
The prospect of prolonged political deadlock, coupled with economic jitters, added urgency to the coalition talks. Details of the final deal remain under wraps, but a joint news conference is scheduled for Wednesday afternoon in Berlin to outline the government’s priorities.
If SPD members endorse the deal, Germany will see a return to conservative leadership at a time when unity and decisive action are crucial for navigating both domestic and international storms.
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