Germany's Conservatives Aim to Revive Economy Amid Global Challenges

Germany's conservatives, led by Friedrich Merz, are in talks with the Social Democrats to form a government, focusing on economic growth amid global trade tensions. The coalition plans to enhance defense and support businesses, addressing challenges like Trump's tariffs and domestic political pressures.

Germany's conservative leader, Friedrich Merz, is close to negotiating an alliance with the Social Democrats (SPD) to establish a government targeting economic recovery in Europe's largest economy. Insiders mentioned that critical discussions may finalize by Wednesday, aiming to mitigate global economic uncertainties.

The anticipated administration, spearheaded by Merz's Christian Democrats (CDU) alongside their Bavarian CSU counterparts, with the SPD as junior partners, emerges amid escalating trade conflicts initiated by U.S. President Donald Trump's tariffs. These economic strains have fueled recession worries and inflation fears globally.

Merz, skeptical of Trump's policies, advocates for increased defense spending and strategic support for struggling businesses. Forecasts for Germany's economic growth have been significantly downgraded, reflecting the persistent challenges. Despite domestic political pressures, Merz proposes a constitutional amendment to spur defense and infrastructure investments, stirring both support and criticism.

(With inputs from agencies.)