Germany’s Coalition Talks Accelerate as Economic Turmoil Tests Merz’s Leadership

Incoming Chancellor Friedrich Merz faces economic shocks, internal dissent, and rising far-right support as CDU/CSU and SPD push for a coalition agreement this week.

• Friedrich Merz seeks to finalize a coalition with the SPD, aiming for a government agreement by the end of the week amid mounting economic and political pressures.
• Germany’s stock market plunged 10% following Donald Trump’s tariffs, intensifying calls for economic reforms and adding urgency to the coalition negotiations.
• Merz faces internal criticism for abandoning fiscal conservatism after approving €1 trillion in new debt to secure coalition support, straining his credibility with conservative voters.
• The far-right Alternative for Germany (AfD) has surged to record poll levels, matching the CDU/CSU for the first time in post-war history, highlighting political polarization.
• Merz’s approval ratings have dropped sharply, with only 25% of Germans expressing support for his leadership as his party grapples with dissent and declining trust.

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