Germany’s Social Democratic Party (SPD) has approved a coalition agreement with the Christian Democratic Union/Christian Social Union (CDU/CSU) alliance, paving the way for a new government under Chancellor-designate Friedrich Merz. The decision, backed by 84.6% of SPD members in an internal vote, clears the final hurdle for forming a government in Europe’s largest economy, with the new administration expected to take office in early May 2025.
Why It Matters: This coalition agreement ends months of political uncertainty in Germany following the collapse of the previous government in November 2024. It is a critical step toward addressing economic challenges, including a looming recession and global trade tensions sparked by U.S. tariffs, as well as security concerns amid the ongoing Russia-Ukraine conflict.
Details of the Coalition Agreement
- Economic Revival: The coalition aims to spur growth through tax cuts, reduced corporate taxes, and infrastructure investments, addressing Germany’s economic contraction over the past two years.
- Migration Policy: A tougher stance on irregular migration includes enhanced border controls and extending the minimum residency period for citizenship from three to five years.
- Defense and Security: The agreement prioritizes increased defense spending, voluntary military service, and support for Ukraine’s NATO membership bid.
- Climate Commitments: While committed to European climate targets, the coalition has faced criticism from the Greens for diluting climate goals and delaying the coal phase-out.
- Key Ministries: The CDU will control the Chancellery, Foreign, and Economy Ministries, while the SPD is set to lead the Finance and Defense Ministries.
Context and Challenges
The coalition, formed after the CDU/CSU’s victory in the February 2025 snap elections, excludes the far-right Alternative for Germany (AfD), which surged to second place. However, internal SPD divisions, particularly from its youth wing (Jusos), and criticisms from the Greens and Left Party highlight tensions over migration policies and social welfare measures. The coalition also faces external pressures from U.S. President Donald Trump’s trade tariffs and geopolitical uncertainties.
Relevance for Competitive Exams
This development is significant for exams like UPSC, SSC, and Banking, where international relations and global economic trends are key topics. Questions may focus on:
- The structure and priorities of Germany’s new government.
- Implications of the coalition for EU policies and transatlantic relations.
- Germany’s role in addressing global challenges like trade wars and climate change.
Source: News on Air, April 30, 2025