Deal reached, Merz new German Chancellor

(Patria) - After several weeks of negotiations, an agreement has been reached on the formation of a new German government. According to the agreement, Friedrich Merz, leader of the center-right Christian Democratic Union (CDU), will replace outgoing Chancellor Olaf Scholz (SPD).

Merz's two-party Union bloc emerged as the strongest political force from the German elections held on February 23. Merz then addressed the Social Democrats, the party led by Scholz, to form a coalition with a parliamentary majority.

It will still take some time before the parliament can elect Merz as chancellor, likely in early May. Before that, the coalition agreement must receive the approval of the Social Democratic Party members through a vote, as well as the CDU convention.

Details of the agreement have not yet been released.

However, last month the two sides pushed plans through parliament to allow for increased defense spending, by easing strict borrowing rules, and establishing a huge infrastructure fund aimed at reviving the stagnant economy.

The elections were held seven months earlier than planned after Scholz's unpopular coalition collapsed in November, three years into a term increasingly marked by infighting and widespread dissatisfaction.

Market turbulence caused by US President Donald Trump's announcement of broad tariffs further increased pressure on Merz's Union and the Social Democrats to conclude coalition negotiations.

This was further fueled by polls showing a decline in support for the Union compared to election results, while the far-right Alternative for Germany, which finished a strong second in February, continued to gain support amid the political vacuum.