Germany's Merz Seeks Coalition Amid Poll Setbacks, Tariff Turmoil

Friedrich Merz, Germany's presumptive next chancellor, has announced a coalition agreement with the Social Democrats aimed at revitalizing the nation's economy and enhancing its defense capabilities in response to increasing threats, particularly from Russia. This deal comes amid significant political pressure, as recent polls indicate the far-right party has drawn level with Merz's conservatives, raising concerns about his leadership. Merz has emphasized the need for Germany to restore economic competitiveness, especially in light of tariff-induced volatility in financial markets, which saw a 10% drop in the country's main equity index. The coalition plans to boost defense spending significantly and reintroduce military service on a voluntary basis. Additionally, the government aims to stimulate the economy through tax cuts and investment while navigating the complexities of international relations, particularly with the United States. The coalition is expected to formally assume office following a parliamentary vote in early May.