Germany's New Coalition: A Growth Revival Amidst Migration Tensions

Germany's CSU, CDU, and SPD have formed a coalition agreement aiming to rejuvenate economic growth and take a firmer stance on migration. This coalition formation is crucial for CDU's Friedrich Merz to establish a new government. The economic outlook is challenging with forecasts cut to 0.1% growth.

The conservative Christian Social Union (CSU) in Germany has given the green light to a coalition pact with its Christian Democratic Union (CDU) sister party and the Social Democrats (SPD). This approval marks a pivotal step towards the formation of a new government, spearheaded by CDU leader Friedrich Merz, set for early May. The coalition advocates a robust strategy aimed at revitalizing growth in Germany, Europe's largest economy, while adopting a stronger stance on immigration policies.

Meanwhile, the global market volatility, aggravated by trade tensions following U.S. President Donald Trump's tariff announcements, casts a shadow over Germany's export-led economy. This has prompted CSU leader Markus Soeder to describe the coalition agreement as a 'rehabilitation course' essential for Germany's economic recovery. The strategy includes significant steps like cutting corporation tax, lowering energy prices, and establishing a commission to review constitutional borrowing restrictions.

On the contentious issue of migration, the coalition proposes strict border controls and the discontinuation of fast-tracked naturalization processes. This agreement follows intense negotiations after February elections, where conservative parties led in votes but failed to secure a majority. With the far-right Alternative for Germany (AfD) emerging in second place, it's imperative for Merz's prospective government to be operational by the first week of May to address these pressing issues.

(With inputs from agencies.)