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.”
Severe flooding triggered by heavy rainfall in southern China has forced the evacuation of about 70,000 people, local media reported on Wednesday.
Former UFC lightweight champions Khabib Nurmagomedov and Islam Makhachev have landed in Baku ahead of Azerbaijan’s first-ever UFC tournament.
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China has unveiled a mosquito-sized bionic drone designed for covert military operations and battlefield reconnaissance, marking a major advance in micro-robotics and stealth technology as part of the country’s growing focus on next-generation warfare capabilities.
Severe flooding triggered by heavy rainfall in southern China has forced the evacuation of about 70,000 people, local media reported on Wednesday.
Former UFC lightweight champions Khabib Nurmagomedov and Islam Makhachev have landed in Baku ahead of Azerbaijan’s first-ever UFC tournament.
Kazakhstan will establish regional water risk management headquarters to address growing water challenges during the vegetation season, the government announced following a meeting chaired by Prime Minister Olzhas Bektenov.
UN High Commissioner for Refugees Filippo Grandi has warned that global refugee protection is facing unprecedented threats, with more than 122 million people forcibly displaced amid ongoing conflicts and shrinking humanitarian aid.
Iranian missiles struck multiple locations across Israel and neighbouring regions early Friday morning, including a Microsoft office complex, according to emergency responders and local media reports.
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Israeli strikes have reportedly targeted areas near the residences of Iran’s Supreme Leader Ayatollah Ali Khamenei and President Masoud Pezeshkian, according to the New York Times, citing local witnesses.
A high-speed tram derailment in central Gothenburg, Sweden, has left at least eight people injured late on Thursday (19 June), after the vehicle slammed into a snack bar on Avenyn Avenue.
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Tajikistan and China have agreed to establish a Joint Working Group on Artificial Intelligence, following high-level talks between President Emomali Rahmon and President Xi Jinping in Astana earlier this week.
Switzerland has announced the lifting of a wide array of economic sanctions on Syria, including measures targeting the country’s central bank. The move follows a series of international steps aimed at supporting Syria’s recovery after the fall of former president Bashar al-Assad in December 2024.
The Trump administration has unveiled sweeping new sanctions targeting Iran’s defence supply chain and Yemen’s Iran-backed Houthi movement, intensifying efforts to block the flow of sensitive military technology and illicit oil revenues fueling regional instability.
Tesla has secured a major agreement to build its first grid-scale battery storage station in China, local media outlet Yicai reported Friday.
Iran has fired a new round of missiles at Israel, with reports of strikes in several locations, as tensions between the two countries continue.
China has unveiled a mosquito-sized bionic drone designed for covert military operations and battlefield reconnaissance, marking a major advance in micro-robotics and stealth technology as part of the country’s growing focus on next-generation warfare capabilities.
Severe flooding triggered by heavy rainfall in southern China has forced the evacuation of about 70,000 people, local media reported on Wednesday.
Former UFC lightweight champions Khabib Nurmagomedov and Islam Makhachev have landed in Baku ahead of Azerbaijan’s first-ever UFC tournament.
Kazakhstan will establish regional water risk management headquarters to address growing water challenges during the vegetation season, the government announced following a meeting chaired by Prime Minister Olzhas Bektenov.
UN High Commissioner for Refugees Filippo Grandi has warned that global refugee protection is facing unprecedented threats, with more than 122 million people forcibly displaced amid ongoing conflicts and shrinking humanitarian aid.
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