Germany’s Merz agrees coalition deal with centre-left

BERLIN: German conservatives under Friedrich Merz agreed a coalition deal with the centre-left Social Democrats (SPD) on Wednesday, aiming to revive growth in Europe’s largest economy just as a global trade war threatens recession.

The deal caps weeks of haggling between chancellor-in-waiting Merz and the SPD after he topped elections in February but fell well short of a majority, with the far-right Alternative for Germany surging into second place.

Pressure to reach a deal has taken on new urgency as the government will take charge at a time of global turbulence in an escalating trade conflict sparked by US President Donald Trump’s sweeping import tariffs.

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Merz, who called Trump’s US an unreliable ally, has already vowed to build up defence spending as Europe faces a hostile Russia, and to support businesses struggling with high costs and weak demand.

Merz has also pledged to get tougher on migration, moving Germany away from a more liberal immigration policy under his conservative predecessor Angela Merkel during the 2015 European migrant crisis.

The coalition deal must still be ratified by a vote of the SPD’s membership.

If the SPD membership backs the deal, the chancellorship would return to conservatives after the three-year interregnum of the SPD’s Olaf Scholz, whose tenure was marked by the economic and political fallout following Russia’s full-scale invasion of Ukraine in 2022.

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