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Germany's Merz and SPD clear first hurdle to forming coalition

Published by Global Banking & Finance Review

Posted on March 8, 2025

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· Last updated: January 25, 2026

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Germany's Merz and SPD clear first hurdle to forming coalition
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BERLIN (Reuters) - German election winner Friedrich Merz's conservatives and the Social Democrats (SPD) have concluded preliminary talks towards forming a coalition government, heads of the parties

Merz and SPD Make Progress in Coalition Talks Ahead of Easter

By Andreas Rinke

BERLIN (Reuters) -German election winner Friedrich Merz's conservatives and the Social Democrats (SPD) have concluded preliminary talks on forming a coalition government, Merz told reporters on Saturday in a joint announcement alongside other party leaders.

In Germany, where coalitions are the norm, governments are typically formed in two phases, with parties first holding exploratory talks and then entering into formal coalition talks.

The two parties were racing for a deal before next week when they hope to push a loosening of Germany's borrowing limits through parliament to revive growth in Europe's largest economy and boost military spending.

Chancellor-in-waiting Merz wants to form a coalition by Easter and has warned it was "five minutes to midnight" for Europe to fend for itself against a hostile Russia, with the U.S. under President Donald Trump no longer seen as a reliable ally.

Merz's conservative CDU/CSU bloc and the SPD have haggled over issues such as migration and welfare payments, coming together after a bruising election campaign.

The two parties have also discussed the issue of equipping Ukraine with longer range Taurus missiles, which outgoing SPD Chancellor Olaf Scholz opposed but Merz supports under certain conditions.

In his opening remarks, Merz promised tougher measures to tackle illegal migration, including by turning away people at Germany's borders and expanding border controls. He also said Germany should be targeting 1%-2% economic growth and promised to lower energy costs to help businesses.

(Reporting by Andreas Rinke, Vera Eckert; writing by Matthias Williams, editing by Sharon Singleton)

Key Takeaways

  • Merz and SPD conclude preliminary coalition talks.
  • Germany aims to finalize coalition by Easter.
  • Key issues include borrowing limits and military spending.
  • Merz supports equipping Ukraine with missiles.
  • Germany targets 1%-2% economic growth.

Frequently Asked Questions

What is the current status of coalition talks in Germany?
Friedrich Merz's conservatives and the Social Democrats have concluded preliminary talks on forming a coalition government.
What are the main issues being discussed in the coalition talks?
The parties are negotiating over migration, welfare payments, and military support for Ukraine.
What is Merz's timeline for forming the coalition?
Merz aims to finalize the coalition by Easter, emphasizing the urgency of the situation in Europe.
How do coalition governments typically form in Germany?
Coalition governments in Germany are formed in two phases: exploratory talks followed by formal coalition negotiations.
What stance does Merz take on illegal migration?
Merz has proposed tougher measures to tackle illegal migration, including expanding border controls and turning away individuals at Germany's borders.

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