What's happened
On April 9, 2025, German conservatives led by Friedrich Merz reached a coalition agreement with the Social Democrats (SPD) to form a government. This deal aims to counter the rising influence of the far-right Alternative for Germany (AfD) amid economic challenges and escalating global trade tensions.
What's behind the headline?
Key Points of the Coalition Agreement
- Economic Measures: The coalition plans to cut taxes for middle and lower-income households, reduce corporate taxes, and support the electric vehicle industry.
- Migration Policy: A tougher stance on migration is proposed, including turning away asylum seekers at borders and scrapping fast-tracked naturalization.
- Defense Spending: Merz has committed to increasing defense spending in response to geopolitical tensions, particularly regarding Russia.
Implications
- Political Landscape: This coalition marks a shift away from the more liberal policies of former Chancellor Angela Merkel, particularly in immigration.
- Economic Outlook: With Germany facing a potential recession due to global trade conflicts, the coalition's economic strategies will be crucial in stabilizing the economy.
- Public Sentiment: The rising support for the AfD indicates a significant shift in public opinion, which the new government will need to address to maintain legitimacy.
What the papers say
According to Al Jazeera, Merz emphasized that the coalition pact sends a 'strong and clear signal' to both citizens and European partners, asserting that 'Germany is back on track.' The Guardian highlights the urgency of the coalition's formation amid economic downturns and trade conflicts, noting that the AfD's rise poses a significant challenge to mainstream parties. The Times of Israel reports that the coalition's agreement includes plans for a national security council and voluntary military service, reflecting a shift in defense policy. Meanwhile, Politico points out that the coalition must still gain approval from SPD members, indicating potential internal challenges ahead.
How we got here
The coalition agreement follows a February election where Merz's Christian Democratic Union (CDU) emerged as the largest party but lacked a majority. The SPD, previously in power, became the only viable partner to exclude the AfD, which has gained significant support.
Go deeper
- What are the key policies of the new coalition?
- How will the coalition address the AfD's rise?
- What economic challenges does Germany face now?
More on these topics
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Germany, officially the Federal Republic of Germany, is a country in Central and Western Europe. Covering an area of 357,022 square kilometres, it lies between the Baltic and North seas to the north, and the Alps to the south.
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Friedrich Merz is a German lawyer and politician. A member of the Christian Democratic Union, he served as a Member of the European Parliament from 1989 to 1994 and was elected to the Bundestag from 1994 until 2009, where he chaired the CDU/CSU parliament
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The Social Democratic Party of Germany is a social-democratic political party in Germany. It is one of the two major contemporary political parties in Germany along with the Christian Democratic Union of Germany.
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Olaf Scholz is a German politician serving as Federal Minister of Finance and Vice Chancellor under Chancellor Angela Merkel since 14 March 2018.
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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Alternative for Germany is a right-wing to far-right political party in Germany. Founded in April 2013, the AfD narrowly missed the 5% electoral threshold to sit in the Bundestag during the 2013 federal election.
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The Christian Democratic Union of Germany is a Christian-democratic and liberal-conservative political party in Germany. It is the major catch-all party of the centre-right in German politics.