BERLIN: German conservatives under Friedrich Merz clinched a coalition deal with the centre-left Social Democrats (SPD) on Wednesday, aiming to revive growth in Europe’s largest economy just as a global trade war threatens recession.

The deal caps weeks of haggling between chancellor-in-waiting Merz and the SPD after he topped elections in February but fell well short of a majority, with the far-right Alternative for Germany surging into second place.

Pressure to reach a deal has taken on new urgency as the government will take charge at a time of global turbulence in an escalating trade conflict sparked by US President Donald Trump’s sweeping import tariffs.

With the AfD breathing down its neck, the coalition signalled a tougher stance on migration, planning to turn away asylum seekers at Germany’s borders and scrap fast-tracked naturalisation, among other measures.

The tougher stance on migration explicitly moves Germany away from a more liberal policy under Merz’s conservative predecessor Angela Merkel during the 2015 European migrant crisis.

During a news conference with his coalition partners, Merz directed a message to the White House in English. “The key message to Donald Trump is Germany is back on track,” he said, promising to ramp up defence spending and boost the competitiveness of the economy.

He said the coalition pact provided a “strong and clear signal” both to its own citizens and other European countries, adding, “Germany is getting a government that is capable of action and strong.” The deal stressed the importance of Germany’s relations with the United States, its largest trading partner, and aims for a free trade deal in the medium term. But Merz also emphasised that the European Union needed a common response to the escalating global tariff war that has put the US and China in particular at loggerheads.

Published in Dawn, April 10th, 2025