The Christian Democrats (CDU/CSU) and the Social Democrats (SPD) have agreed to form a coalition government in Germany, with CDU leader Friedrich Mertz as Chancellor, amid the backdrop of Trump’s tariffs and Germany’s economic downturn.
The CDU secured first place in the elections held on February 23, 2025, with 28.5%, while the SPD came third with 16.4%. The far-right AfD finished second with 20.8%, but was excluded from the government coalition.
If the agreement is ratified, Mertz will be sworn in at the German Bundestag in early May.
The two parties have agreed on measures including tax relief for low- and middle-income households, gradual tax cuts for businesses, and subsidies for electric cars to support the German automotive industry.
For the agreement to be ratified, it still requires approval from the 357,000 members of the SPD and the leadership of the CDU/CSU Union.
One of the main campaign issues, migration, will be managed by the CDU, which will take on the Ministry of the Interior portfolio, with F. Mertz promising to end “irregular migration.”
The crucial Ministry of Finance, as well as the Ministry of Defense, will go to the SPD, while the CDU will take the equally important Ministry of Foreign Affairs.
Germany, which ended 2024 in recession (as it did in 2023), was also tasked with handling the collapse of the previous government coalition between the SPD, the Greens, and the Liberals (SDP), led by Chancellor Olaf Scholz, a situation that led to the early elections in February.
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