Germany Forms New Coalition Government to Navigate Global and Domestic Challenges

The CDU/CSU and SPD finalize a coalition agreement prioritizing trade, defense, and economic reforms as they prepare to take office in May 2025.

The coalition agreement emphasizes securing a free trade deal with the United States while reducing import tariffs to address trade tensions exacerbated by US policies under President Trump.
Germany plans to recalibrate its foreign policy, including continued military support for Ukraine, with debates ongoing about providing Taurus missiles.
Economic growth and industrial support take precedence in domestic policy, with a €10bn 'Germany fund' and energy price reductions for businesses and households.
The coalition signals a shift in climate policy by balancing environmental goals with economic competitiveness, though the coal phaseout by 2038 remains intact.
Plans include strengthening European defense independence and exploring deeper cooperation with EU allies amid uncertainty over US NATO commitments.