Friedrich Merz's Coalition Triumph Amid Trade Turmoil

Friedrich Merz's conservatives forge a coalition with the SPD amidst a trade war threat. The deal aims to revive Germany's economy while navigating international tensions. Merz promises defense boosts, tax reforms, and tougher migration policies. The coalition excludes the AfD amidst surging dissent.

On Wednesday, Friedrich Merz's conservative bloc and the center-left Social Democrats (SPD) reached a coalition agreement, targeting economic rejuvenation as global trade tensions rise. This coalition emerges as Germany faces possible recession risks, driven by U.S. import tariffs, adding urgency to the deal's formation.

The coalition deal, crafted after weeks of negotiation, aims to address significant challenges. Merz plans to enhance defense spending in response to potential threats from Russia and to bolster businesses facing economic pressures. Additionally, he intends to implement stricter migration policies, deviating from Angela Merkel's previous stance.

The coalition agreement still requires approval from the SPD's membership. If ratified, conservatives will reclaim the chancellorship after Olaf Scholz's three-year term. The government restructure potentially positions Lars Klingbeil as finance minister and retains Boris Pistorius in defense.

(With inputs from agencies.)