German conservatives, center-left agree in principle to form govt

Germany's conservative election winner Friedrich Merz came a step closer Saturday towards forming a government which he has pledged will revive Europe's top economy and its armed forces with massive new spending.

The bold moves are part of his plan to rebuild Berlin's standing in Europe, which Merz has said must respond to the sweeping changes driven by US President Donald Trump that have rocked the transatlantic alliance.

Merz's CDU/CSU bloc and the Social Democrats (SPD) of defeated Chancellor Olaf Scholz on Saturday announced they had wrapped up exploratory talks and would now move onto the next, decisive stage of full-fledged coalition negotiations.

"We concluded the consultations between CDU/CSU and SPD and we have drawn up a joint exploratory paper," Merz said.

He praised the "extremely good and very collegial atmosphere" of the talks that had passed a major hurdle less than two weeks after the February 23 elections.

Merz said both sides shared "the conviction that we have a great task ahead of us".

He said all were "aware of the great challenge we are facing -- above all the international situation, but also... facing the whole of Europe".

Border control agreement

Merz said both sides had agreed on tough new steps to limit irregular immigration, including refusing all undocumented migrants at the borders, even those seeking asylum.

The move was a key demand of Merz, who has stressed the need to win voters back from the far-right Alternative for Germany (AfD), which scored a record of over 20 percent in the election.

Lars Klingbeil of the SPD called Saturday's deal "an important first step" and said both sides agreed on the need to "get our country back on track".

Friedrich Merz, Germany's chancellor-in-waiting and leader of the Christian Democratic Union party CDU, Bavarian state premier and leader of the Christian Social Union (CSU) Markus Soeder and Social Democratic party (SPD) co-leaders Saskia Esken and Lars Klingbeil give a statement after coalition talks, in Berlin, Germany, March 4, 2025.Reuters

He said his party had won assurances on key demands, such as a 15-euro-($16-)per-hour minimum wage and stable pensions.

The plan is for Germany to have a new government in place by mid-April that would end around half a year of political paralysis after Scholz's three-way coalition imploded in November.

Bold economic plans

Even as some hurdles remain, the likely future governing allies have already surprised European partners with their plan to spend hundreds of billions of euros to revive the ailing economy and rebuild the military

The ambitious and costly plans would cast aside Germany's historic reluctance to take on large-scale debt and would see it invest in defense on a scale not seen since World War II.

The spending boost -- which Merz's Bavarian ally Markus Soeder has termed an "XXL"-sized splurge -- comes in response to Trump and his administration casting doubt in Europe on the future strength and reliability of the NATO alliance.

Alarm at Trump's actions have added urgency to the talks, spurred by his public berating of his Ukrainian counterpart Volodymyr Zelensky in a White House meeting.

U.S. President Donald Trump meets with Ukrainian President Volodymyr Zelenskiy at the White House in Washington, D.C., U.S., February 28, 2025.Reuters

The talks in Germany have been closely watched by Germany's European neighbors to see if Berlin can play a greater security role as the continent reels from the United States' pivot away from supporting Ukraine.

The two parties are now moving to talks on a detailed formal coalition agreement, including haggling over cabinet posts.

Racing against deadline

However, both proposals will need a two-thirds majority in the outgoing parliament, with the two big blocs needing the Greens' cooperation.

Merz said new investment could flow into climate projects and voiced confidence that "we will find a way together to achieve a constitutional amendment".

The CDU/CSU and SPD are in a hurry to push the changes through before a deadline looms.

On March 25 the newly-elected parliament will convene. From then on, the AfD and the far-left Linke will be able to block any such proposals.