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,
Reuters reports.
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 U.S. President Donald Trump's sweeping import tariffs.
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."
