ADVERTISEMENTConservative and centre-left parties in Germany have reached a deal to form a new government after weeks of negotiations, paving the way for new leadership in Europe’s biggest economy after months of political limbo.
Friedrich Merz, the leader of the centre-right Christian Democratic Union (CDU), is expected to become Germany’s next chancellor under the agreement, replacing Olaf Scholz.
The parties involved in the coalition have said they will hold a press conference on the deal at 3 pm CET.
Merz’s two-party Union bloc emerged as the strongest force from Germany’s February federal elections.
Merz turned to the Social Democrats, Scholz’s centre-left party, to put together a coalition with a parliamentary majority.
Political timeline
But it will still take some time before parliament can elect Merz as Chancellor, which is expected to happen some time in perhaps early May.
Before that can happen, the coalition deal needs the approval by ballot of the SDP membership and by a convention of Merz’s CDU.
Details of the agreement haven’t immediately been made public.
Last month, the two sides pushed plans through parliament to enable higher defence spending by loosening strict rules on incurring debt and to set up a huge infrastructure fund that’s aimed at boosting the economy.
That was an about-turn for Merz, whose party had spoken against running up new debt before the election without entirely closing the door to future changes to Germany’s self-imposed “debt brake.”
February’s election took place seven months earlier than planned after Scholz’s unpopular “traffic light” coalition collapsed in November, three years into a term that was marred by infighting and widespread discontent.
Pressure from abroad and at home
Market turbulence caused by US President Donald Trump’s announcement of sweeping tariffs added to pressure for Merz’s Union and the Social Democrats to bring coalition talks to a swift conclusion.
The tariffs threaten to add to the woes of Germany’s export-heavy economy that has shrunk for the past two years, and generating growth will be a central task for the new government.
Increasing doubts about the US commitment to European allies also played into the prospective coalition’s decision to enable heftier defence spending.
Merz said last month that Germany and Europe must quickly strengthen their defence capability and that “‘whatever it takes’ must also go for our defence now.”
ADVERTISEMENTAnother factor in the haste to reach an agreement was a decline for the Union in the opinion polls, showing support slipping from its election showing, while the far-right Alternative for Germany (AfD), which finished a strong second in February, gained as the political vacuum persisted.
The prospective new coalition brings together what have been post-World War II Germany’s traditional big parties, but the Union’s election-winning performance in February was lacklustre and the Social Democrats dropped to their worst post-war showing in a national election.
Together, they have 328 seats in the 630-member lower house of parliament, the Bundestag.
