German Coalition Deal Seeks Stability Amid Global Trade Tensions

German conservatives, led by Friedrich Merz, have reached a coalition agreement with the SPD to address economic challenges amidst global trade tensions. The deal focuses on tax cuts and defense spending, while signaling a tougher migration stance. The coalition awaits SPD ratification to take effect.

German conservatives under Friedrich Merz have reached a coalition agreement with the centre-left Social Democrats (SPD), aiming to revitalize growth in Europe's largest economy amid looming global trade tensions.

Key measures include tax cuts, support for the electric car industry, and defense spending hikes. A tougher stance on migration and fast-tracked naturalization reflects a departure from liberal policies under Merkel. The coalition's formation comes as German economic forecasts reveal a contraction, highlighting the need for swift government action.

The agreement sets the stage for conservatives to regain the chancellorship post-Scholz, while the SPD will helm finance and defense. The new government aims to navigate geopolitical uncertainties, particularly with a more conservative approach to economic and foreign policy.