Germany Gets a Government

German conservatives led by chancellor-in-waiting Friedrich Merz reached a coalition agreement with the center-left Social Democratic Party (SPD) on Wednesday, ending weeks of political uncertainty amid growing recession fears following US-imposed tariffs on Europe’s biggest economy, Reuters reported.

The deal follows an election victory in February by Merz’s Christian Democratic Union (CDU): The party took the largest share of seats but fell short of a majority. The far-right Alternative for Germany (AfD) came in second place.

Even so, all mainstream parties in Germany have refused to work with the AfD due to the country’s legacy of National Socialism.

The deal comes amid intense pressure on German politicians to quickly form a new government that can confront the historic challenges of the United States’ trade war. At the same time, Germans are concerned over the threat posed by Russian President Vladimir Putin.

The chancellor-in-waiting, who is expected to be sworn in in May, said that he intends to boost defense spending to brace for potential Russian aggression – especially now that the US wants to limit their involvement in European security – and to assist businesses facing rising costs and decreasing demand, according to CNN.

The new coalition has already unveiled new economic and tax reforms to revamp its sluggish economy as it faces an escalating trade conflict with the US that could deeply undermine its growth – Germany is one of the world’s leading exporters, and its economy is heavily dependent on trade.

Merz also said he intends to tighten immigration and asylum policies, steering away from the more liberal immigration politics of his conservative predecessor, Angela Merkel, who governed during the 2015 European migration crisis, when more than one million migrants entered Germany.

Earlier this week, Germany ordered a halt to the United Nations’ resettlement program applications.