Germany’s New Coalition Aims for Stability
Friedrich Merz, Germany's Chancellor-in-waiting and leader of the Christian Democratic Union (CDU), has finalized a coalition agreement with the centre-left Social Democrats (SPD). The deal aims to revitalize Europe’s largest economy, promote tax cuts, and implement stricter migration controls in the face of growing global economic uncertainty.
Merz and SPD leaders reached the agreement after his CDU/CSU alliance won the February elections, but fell short of a majority. The far-right Alternative for Germany (AfD) surged into second place, increasing pressure on mainstream parties to form a stable government.
The coalition’s economic strategy includes tax cuts for middle and lower incomes, a reduction in corporate taxes, and lower energy prices. Key industries, particularly the electric vehicle sector, will also receive strong support. The deal also promises to reform Germany’s debt brake, which has long been criticized for limiting public investment.
On migration, the coalition aims for a tougher stance, including measures to turn away asylum seekers at the border and scrap fast-tracked naturalization for certain groups. This marks a shift from the liberal migration policies pursued under former Chancellor Angela Merkel during the 2015 migrant crisis.
The coalition also vows to strengthen Germany’s defense capabilities, with plans to increase defense spending in response to rising European security threats, especially in light of tensions with Russia. Merz has criticized previous U.S. policies under former President Donald Trump, calling for a more assertive German stance in global geopolitics.
With the coalition deal now finalized, Merz’s government is poised to tackle Germany’s economic and security challenges while navigating an uncertain global landscape.
