The conservative Christian Democrats (CDU/CSU) and center-left Social Democrats (SPD) have announced a coalition agreement, bringing Germany that much closer to forming a new government.
It appears international friction and the recent tariff policies imposed by US President Donald Trump pushed negotiators to reach an agreement sooner, rather than later.
Presenting the new agreement on Wednesday, Friedrich Merz of the CDU, likely to become the country’s next chancellor, said Germany was currently facing a “situation of growing geopolitical tensions.”
The response of the coalition-in-waiting to these uncertain times, he said, was that “we want to, and we will, help shape change in the world, for Germany.”
Lars Klingbeil, the co-leader of the SPD, added that “this is a turning point. We are living in truly historic times.”
When the new government takes office, expected it early May, it will be facing several important challenges on the world stage.
What trade policies will the future government pursue?
Trump’s steep import tariffs and the countermeasures some affected countries have adopted in retaliation have sent global stock markets into a downward spiral and sparked fears of a global trade war. As an export-driven nation, these tariffs have hit Germany particularly hard — and even more so given that its economy has been in recession for more than two years.
The European Union manages trans-Atlantic trade, so Germany cannot act independently in this matter. That’s why, in light of its economic vulnerability, the incoming German government is hoping to deescalate.
The coalition agreement states that Germany will aim for “a medium-term free trade deal with the United States,” while in the short term, “the coalition parties aim to avoid a trade conflict with the US and focus on reducing import tariffs,” on both sides of the Atlantic.
Given Trump’s recent series of economic about-faces, this approach might prove a bit too optimistic.
What next for Germany’s trans-Atlantic relations?
Merz has long been a staunch supporter of trans-Atlantic relations. He chaired Atlantik-Brücke, a nonpartisan organization dedicated to fostering US-German relations, for 10 years.
And while he’s never actually lived in the United States, he does say that the years he spent working for the US-based global investment firm BlackRock made him very familiar with the US mindset.
However, ever since Trump retook the White House for a second term, it would appear Merz’s faith in close trans-Atlantic ties has been shaken.
When the US president — falsely — blamed Ukraine for Russia’s war of aggression, Merz stated that he was ” shocked by Donald Trump.” And he was reportedly equally appalled when Trump and his vice president, JD Vance , publicly embarrassed Ukrainian President Volodymyr Zelenskyy at the White House in late February.
Germany, meanwhile, fell out of Trump’s favor years ago, when former Chancellor Angela Merkel was still at the helm. This was not least due to her open refugee policy, which apparently was a thorn in the eye of the US nationalist.
But even though Merz has consistently distanced himself from Merkel politically, a personal meeting between him and Trump would likely not be easy. To date, nothing has been planned.
Will Germany deliver Taurus missiles to Ukraine?
Trump’s efforts to secure a peace “deal” for Ukraine have relegated European nations to the role of spectators. So far, he has only spoken directly with Russian President Vladimir Putin about a possible peace framework. Ukraine’s Zelenskyy has remained sidelined from discussions.
Should an agreement emerge, it’s likely to amount to an imposed settlement for Ukraine, and Germany and other EU nations will presumably be left with the task of enforcing it.
The incoming coalition appears to want to continue supporting Ukraine. “We stand with the brave Ukrainian people. They can rely on us,” said Klingbeil on Wednesday. In reality, the coalition partners have yet to make a final decision on the matter.
Until then, it remains unclear how military aid will proceed. While he was still leading the opposition in the previous government under outgoing Chancellor Olaf Scholz, Merz advocated for sending Taurus long-range cruise missiles to Ukraine. Scholz consistently opposed the move, fearing it could draw Germany into direct conflict with Russia.
Can Europe defend itself without US backing?
On election night in February, Merz admitted he was unsure whether Trump would honor the US’ collective defense commitments under NATO’s Article 5, should the need arise. That’s why, he said, he wanted to strengthen European defense cooperation, “so that, step by step, we can really achieve independence from the US.”
Merz has already secured parliamentary approval for his famous financial pledge of “whatever it takes” to strengthen the German armed forces.
Part of deepening European defense cooperation would mean exploring ways in which Germany and Europe might benefit from the nuclear deterrence offered by the continent’s two nuclear powers, France and the UK. That will be no easy feat, given that neither nuclear power is likely to readily share its capabilities.
Many other EU nations also hold reservations against deeper military cooperation. And Hungarian Prime Minister Viktor Orban not only maintains close ties with Russia’s Putin, he also opposes military aid for Ukraine.
Is Germany’s EU policy losing momentum?
In the past, Merz repeatedly accused Scholz’s administration of neglecting European ties, especially regarding Germany’s relations with its neighbors France and Poland. Now that he’s poised to take charge, Merz aims to change this — but there’s much to do.
Just days after winning the election, Merz visited French President Emmanuel Macron at the Elysee Palace in Paris. But Macron is politically weakened at home.
And while Poland might have a pro-European government under former EU Council President Donald Tusk, Berlin does not have a close relationship with Warsaw.
Across the EU enthusiasm for deeper integration has waned, with right-wing populist movements steadily rising in many member states.
How will Germany reduce security risks with China?
Amid ongoing trade-related friction with Trump, some politicians in Berlin and Brussels are eyeing China as an alternative trade partner. But trade with China is no longer as lucrative as it once was. German car exports, once a major success in China, have seen declining sales.
Now, the EU has begun imposing restrictions on Chinese electric vehicles. As an export-oriented country, Germany will likely try to prevent these trade barriers from becoming too high.
The future government will also aim to reduce security risks associated with China. In the coalition agreement, the partners have agreed to “effectively prevent foreign investments in critical infrastructure and strategically relevant sectors that conflict with our national interests.” This passage is likely directed straight at China.
Can Benjamin Netanyahu visit Germany?
When it comes to relations with Israel, Germany sees itself in a particularly difficult bind. On the one hand, due to Germany’s Nazi past and its orchestration of the Holocaust, in which over 6 million Jews and nearly 5 million other people from minority groups were killed, German governments have since seen a historic duty in safeguarding the state of Israel.
On the other hand, Israel’s ongoing military action in Gaza and the occupied West Bank has drawn some guarded criticism from German politicians as being disproportionate.
Israel claims its military campaign in Gaza and the West Bank is to root out the Palestinian nationalist and Islamist movement Hamas. Since October 7, 2023, Israeli forces have killed at least 50,000 Palestinians in Gaza, overwhelmingly women and children, and displaced more than 80% of the population. The occupied West Bank has also recently seen a spike in violence, with over 700 Palestinians killed in the same time frame.
Germany and several other countries designate Hamas as a terrorist organization.
In late 2024, the International Criminal Court issued an arrest warrant for Israeli Prime Minister Benjamin Netanyahu on charges of alleged war crimes and crimes against humanity. This puts Germany in a tough spot. As a signatory to the Rome Statute which underpins the ICC, Germany would be legally obligated to arrest and extradite Netanyahu, should he enter Germany.
But Merz has already promised that, under his chancellorship, Germany would “find ways and means” for Netanyahu to visit and leave the country unbothered.
Is Germany abandoning its climate goals?
At the tail end of the outgoing administration, the Green Party managed to secure significant funding for climate protection and even saw the constitution amended to include the goal of climate neutrality by 2045. But on a global scale, the situation looks much different.
Right after taking office, Trump withdrew the US from all international climate agreements. Meanwhile, major US financial institutions like BlackRock and JPMorgan have also distanced themselves from climate-friendly investments.
This will make it much harder for Germany to push forward climate protection measures at an international level. Environmental groups suspect the new government is not as committed to the issue, anyway. They see the coalition agreement’s wording — “climate protection must be balanced with economic competitiveness and social equity” — as a substantial weakening of Germany’s previous climate goals.
This article was originally written in German.
