Germany’s Friedrich Merz agrees deal to form new government with rival party

The leader of Germany’s Christian Democratic Union party Friedrich Merz has sealed a deal to form a new government with the country’s Social Democrats.

The new government’s priorities are to spur economic growth, ramp up defence spending, take a tougher approach to migration and catch up on long-neglected modernisation.

The agreement paves the way for new leadership in the European Union’s most populous member, which has Europe’s biggest economy. It follows months of political drift and weeks of negotiations as the continent faces uncertainty over sweeping tariffs imposed by the United States and its commitment to European allies’ defence.

Mr Merz is on track to become Germany’s new leader in early May, replacing outgoing Chancellor Olaf Scholz.

The 69-year-old’s two-party Union bloc emerged as the strongest force from Germany’s election on February 23. Mr Merz turned to the Social Democrats, Mr Scholz’s party, to put together a coalition with a parliamentary majority.

Before Mr Merz can take the helm, the coalition deal needs approval in a ballot of the Social Democrats’ membership and by a convention on April 28 of Mr Merz’s Christian Democratic Union party. Once those hurdles are cleared, the lower house of parliament – in which the allies have 328 of the 630 seats – can elect him as chancellor.

Mr Merz said the deal is “a very strong and clear signal to the people of our country, and also a clear signal to our partners in the European Union: Germany is getting a government that is capable of acting and will act strongly”.
Asked about his message to the US president, Mr Merz replied: “The key message to Donald Trump is, Germany is back on track. Germany will fulfil the obligations in terms of defence and Germany is willing to strengthen their own competitiveness.”

He added: “We will bring the European Union forward.”