German parties agree to form a new government after months of drift in Europe’s biggest economy

Friedrich Merz set to become Germany's next leader in coalition deal, aiming to boost economy and defense capabilities.

Conservative and center-left parties reached a deal to form a new German government on Wednesday (April 9, 2025) after weeks of negotiations, paving the way for new leadership in Europe’s biggest economy after months of political drift.

Friedrich Merz, the leader of the center-right Christian Democratic Union, is expected to become Germany’s next leader under the agreement, replacing outgoing Chancellor Olaf Scholz. The parties involved sent an invitation to a news conference on the coalition deal at 3 p.m. (1300 GMT).

Mr. Merz’s two-party Union bloc emerged as the strongest force from Germany’s election on February 23. Mr. Merz turned to the Social Democrats, Scholz’s center-left party, to put together a coalition with a parliamentary majority.

It’s still going to be a little while before parliament can elect Merz as chancellor, perhaps in early May. Before that can happen, the coalition deal will need approval in a ballot of the Social Democrats’ membership and by a convention of Merz’s CDU.

Details of the agreement weren’t immediately available.

But already last month, the two sides pushed plans through parliament to enable higher defense spending by loosening strict rules on incurring debt and to set up a huge infrastructure fund that’s aimed at boosting the stagnant economy.

That was an about-turn for Merz, whose party had spoken out against running up new debt before the election without entirely closing the door to future changes to Germany's self-imposed “debt brake.”