Description: Germany’s Chancellor – in – waiting Friedrich Merz announced that his party has reached a coalition agreement with the center – left Democrats, SPD. The long-awaited alliance alleviates the pressure from the far – right AfD, as Merz has pledged to tackle migration, tax policies and bolstering Germany’s economy in volatile market conditions. Coalition goals have already been set with the new SPD leader Lars Klingbeil, who would most likely be appointed as Germany’s new Finance Minister or Vice – Chancellor, while Boris Pistorius would remain the country’s Defense Minister. Germany’s new government has pledged to stimulate trade with the US and bring import tariffs to almost zero, and tackle energy prices with subsidies and sustainable energy projects. Merz also touched on Germany’s issue with migration and stated that the so-called turbo naturalization would be paused, and migration laws would become stricter. He also reiterated that Germany would enhance defense spending and tackle challenges within its internal debt brake issues to meet new NATO standards.
Impact: Months of negotiations have led to the forming of a mixed coalition of center – left and center right political entities which would aim at putting Germany on Europe’s pedestal once again. Challenging issues lie ahead as Germany would most likely face brewing pressure from the far – right AfD on key national issues such as migration and debt relief. The coalition agreement arrived at a sensitive time when AfD surged in the popularity polls, stipulating that the far – right party would most likely be a serious political agitator in the Bundestag. Setting political pledges aside, Merz and his government would have to deliver big in the short to mid – term in order to plunge Germany in Europe’s driving seat in times of severe economic and security disruptions. Overwhelming internal issues, such as the debt brake, migration, high energy prices and the decline of Germany’s industrial power could restrain the country from contributing towards Europe’s newly formed strategic path aimed at defensive and economic independence.