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.”
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The African Union has endorsed a campaign to end the use of the Mercator map, saying it distorts Africa’s true size and reinforces outdated stereotypes.
Hungarian opposition leader Peter Magyar has called on Russia to guarantee it will not interfere in Hungary’s politics, saying any future cooperation depends on respecting the country’s sovereignty.
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Russia offered concessions on all five occupied Ukrainian regions during the Trump–Putin summit in Alaska, and the U.S. may provide direct security guarantees to Ukraine, a senior American envoy has said.
A powerful eruption at Japan’s Shinmoedake volcano sent an ash plume more than 3,000 metres high on Sunday morning, prompting safety warnings from authorities.
According to the German Research Centre for Geosciences (GFZ), a magnitude 5.7 earthquake struck the Oaxaca region of Mexico on Saturday.
A magnitude 5.2 earthquake struck 56 kilometres east of Gorgan in northern Iran early Sunday morning, according to preliminary seismic data.
A deadly heatwave has claimed 1,180 lives in Spain since May, with elderly people most at risk, prompting calls for urgent social support.
Media accreditation is now open for COP30, the United Nations Climate Change Conference, set to take place in Belém, Brazil in 2025.
U.S. President Donald Trump may offer NATO-like protection for Ukraine, a move that Russia is open to, according to his top foreign policy aide. The suggestion comes ahead of talks in Washington with Ukrainian President Volodymyr Zelenskyy and European leaders on possible security guarantees.
A 5.8-magnitude undersea earthquake hit Indonesia’s Sulawesi island on Sunday, injuring 29 people and damaging buildings, including a church where worshippers were gathered.
Three men have been killed and nine others wounded in a gang-related shooting at a crowded nightclub in Brooklyn, despite New York City recording historic lows in gun violence this year.
The African Union has endorsed a campaign to end the use of the Mercator map, saying it distorts Africa’s true size and reinforces outdated stereotypes.
Hungarian opposition leader Peter Magyar has called on Russia to guarantee it will not interfere in Hungary’s politics, saying any future cooperation depends on respecting the country’s sovereignty.
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