German conservative leader Friedrich Merz has struck a coalition deal with the centre-left Social Democrats (SPD), forming a new government aimed at lifting Europe’s largest economy out of stagnation just as U.S. tariffs risk plunging global trade into crisis.
Merz, who is set to become chancellor after February’s election win, fell short of a majority, with the far-right AfD surging into second place. His deal with the SPD ends weeks of talks and arrives at a moment of global volatility.
“The key message to Donald Trump is: Germany is back on track,” Merz said in English during a joint press conference, promising to raise defence spending and boost Germany’s economic competitiveness.
The coalition agreement includes tax cuts for low and middle-income earners, corporate tax relief, lower energy prices, support for electric vehicles, and the rollback of a controversial supply chain law. It also pledges to reform the “debt brake” fiscal limits that many economists see as restricting growth.
Merz credited European unity with influencing Trump’s sudden decision to pause new tariffs for 90 days. “This example shows you: unity helps,” he told RTL, calling for a 0% transatlantic tariff deal to end the crisis.
Defence and migration also feature prominently in the pact. The coalition will introduce voluntary military service, set up a national security council, speed up arms procurement, and support Ukraine’s bid to join NATO.
On migration, the tone shifts sharply from the Merkel era, with plans to turn away asylum seekers at the border and scrap fast-track citizenship. With the AfD gaining support, Merz is under pressure to reclaim the narrative on migration and security.
The CDU will control the economy, foreign affairs, and the chancellery, while the SPD will hold finance and defence. That likely puts SPD leader Lars Klingbeil at the helm of the finance ministry and leaves Defence Minister Boris Pistorius in place.
But Merz’s challenge is growing. A new Ipsos poll shows the AfD leading nationally with 25%, ahead of Merz’s conservatives at 24%. Critics also point to his borrowing push to fund spending, saying it undermines Germany’s tradition of fiscal discipline.
Economists warn time is short. “The agreed infrastructure investments need to be launched quickly,” said Deutsche Bank’s Robin Winkler. “Germany must act now to avoid a third year of recession.”
Talks in Paris between U.S. officials and European leaders have kickstarted a new diplomatic format aimed at shaping Ukraine's post-war future, with the involvement of Europe’s three most powerful countries.
A gunman opened fire at Florida State University on Thursday, killing two people and injuring four others before being shot by police. The attacker, identified as 20-year-old Phoenix Ikner, is the son of a Leon County deputy sheriff.
A federal grand jury has indicted Luigi Mangione, the man accused of killing a top UnitedHealth executive in New York last year, paving the way for prosecutors to seek the death penalty.
Ukrainian President Volodymyr Zelenskyy said on Thursday that Russia has reduced strikes on energy facilities but redirected attacks toward civilian infrastructure, undermining a U.S.-brokered ceasefire agreement.
Hamas has rejected Israel’s latest offer of a temporary truce in Gaza, instead demanding a comprehensive agreement that would end the war and include a full prisoner exchange.
Talks in Paris between U.S. officials and European leaders have kickstarted a new diplomatic format aimed at shaping Ukraine's post-war future, with the involvement of Europe’s three most powerful countries.
A gunman opened fire at Florida State University on Thursday, killing two people and injuring four others before being shot by police. The attacker, identified as 20-year-old Phoenix Ikner, is the son of a Leon County deputy sheriff.
A federal grand jury has indicted Luigi Mangione, the man accused of killing a top UnitedHealth executive in New York last year, paving the way for prosecutors to seek the death penalty.
Ukrainian President Volodymyr Zelenskyy said on Thursday that Russia has reduced strikes on energy facilities but redirected attacks toward civilian infrastructure, undermining a U.S.-brokered ceasefire agreement.
Hamas has rejected Israel’s latest offer of a temporary truce in Gaza, instead demanding a comprehensive agreement that would end the war and include a full prisoner exchange.
The Russian ruble has emerged as the top-performing currency globally in 2025, registering an impressive 38% appreciation against the US dollar since the beginning of the year, according to a report by Bloomberg.
A small plane crashed near Kopake, New York, on April 13, killing at 6 people. The Mitsubishi MU-2B aircraft, carrying six people, went down under unclear circumstances. This marks the second aviation accident in New York in a week, raising safety concerns.
Several regions in Ukraine faced heightened alert on Palm Sunday, as reports of explosions and missile threats drew public attention and official responses.
Start your day informed with AnewZ Morning Brief: here are the top news stories for April 16th, covering the latest developments you need to know.
A tourist helicopter crashed into New York City's Hudson River on Thursday, killing all six people on board, including a Spanish family with three children and the pilot.
Talks in Paris between U.S. officials and European leaders have kickstarted a new diplomatic format aimed at shaping Ukraine's post-war future, with the involvement of Europe’s three most powerful countries.
A gunman opened fire at Florida State University on Thursday, killing two people and injuring four others before being shot by police. The attacker, identified as 20-year-old Phoenix Ikner, is the son of a Leon County deputy sheriff.
A federal grand jury has indicted Luigi Mangione, the man accused of killing a top UnitedHealth executive in New York last year, paving the way for prosecutors to seek the death penalty.
Ukrainian President Volodymyr Zelenskyy said on Thursday that Russia has reduced strikes on energy facilities but redirected attacks toward civilian infrastructure, undermining a U.S.-brokered ceasefire agreement.
A U.S. federal judge has ruled that Google illegally built monopoly power in its online advertising business, siding with the Department of Justice in a landmark antitrust case that could force the tech giant to break up parts of its empire.
Talks in Paris between U.S. officials and European leaders have kickstarted a new diplomatic format aimed at shaping Ukraine's post-war future, with the involvement of Europe’s three most powerful countries.
A gunman opened fire at Florida State University on Thursday, killing two people and injuring four others before being shot by police. The attacker, identified as 20-year-old Phoenix Ikner, is the son of a Leon County deputy sheriff.
A federal grand jury has indicted Luigi Mangione, the man accused of killing a top UnitedHealth executive in New York last year, paving the way for prosecutors to seek the death penalty.
Ukrainian President Volodymyr Zelenskyy said on Thursday that Russia has reduced strikes on energy facilities but redirected attacks toward civilian infrastructure, undermining a U.S.-brokered ceasefire agreement.
Hamas has rejected Israel’s latest offer of a temporary truce in Gaza, instead demanding a comprehensive agreement that would end the war and include a full prisoner exchange.
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