Germany’s incoming Chancellor Merz forms coalition with centre-left as Trump tariffs threaten economic stability

Germany's chancellor-in-waiting Friedrich Merz

Germany has formed a new political coalition deal under the conservative leader Friedrich Merz who is the country's chancellor-in-waiting. The alliance is among the Christian Democratic Union, Christian Social Union and Social Democratic Party to form the country's new government.

Germany held its federal elections on February 23, 2025, where the conservative Christian Democratic Union (CDU), led by chancellor candidate Friedrich Merz, along with its sister party, the Christian Social Union (CSU), emerged victorious with 28.6% of the vote.

This alliance comes at a critical time, as Europe’s largest economy faces mounting challenges from global economic turbulence, rising security concerns, and shifting geopolitical dynamics.

Merz, a seasoned conservative figure, struck a confident tone as he introduced the coalition’s vision for the future. “We will help shape the change in the world,” he said. “The coalition agreement is a signal of a new beginning... for our country.”

Economic revival and global challenges

The new coalition’s primary focus will be to reignite growth in Germany’s sluggish economy, which is teetering under the threat of a global trade war. With recession fears looming large, the deal aims to restore confidence and stability while bolstering Germany's influence on the international stage.

Backing Ukraine and reassessing security

In a firm stance on global affairs, Merz’s incoming government pledged “comprehensive support” for Ukraine, reaffirming Germany’s commitment to defending European democratic values in the face of Russia’s ongoing invasion.

Security will also be a central theme for the new administration. Amid growing doubts about the U.S. commitment to NATO and European defence under President Donald Trump, the coalition has promised a significant increase in defence spending. “Spending on our defence must increase significantly... by the end of the legislative period,” the coalition agreement states.

Crackdown on irregular migration

On the domestic front, Merz announced plans for a tougher migration policy aimed at tightening border controls and curbing illegal immigration. “There will be controls at national borders and we will also turn away asylum seekers,” he said, emphasizing a “repatriation offensive” for individuals residing in Germany without legal status.

Bold promise for the future

With the ink now dry on the coalition agreement, Merz has positioned his government as one determined to tackle Germany’s pressing issues head-on—from economic recovery and defence to immigration reform and global diplomacy.

“We want to move our country forward again,” Merz declared, setting the tone for what could be one of the most transformative periods in recent German politics.

(With agency inputs)