Overview

• CDU, CSU, and SPD are advancing coalition talks following Germany's federal election, with a focus on forming a government before the new Bundestag convenes later this month.
• Key discussions include the creation of two major special funds, one for defense and another for infrastructure, potentially requiring constitutional amendments.
• The urgency of these talks is heightened by U.S. President Donald Trump's controversial stance on the Ukraine war, including threats to withdraw support and overtures to Russian President Vladimir Putin.
• Both parties are considering reforms to Germany's debt brake to enable increased defense spending, with experts proposing up to €400 billion for military upgrades.
• The potential coalition reflects Germany's need to assert greater independence in European security policy as trust in the U.S. as a reliable ally wanes.