Germany's centrist parties finalize coalition amid tariff impacts

Germany's major centrist parties have finalized a coalition agreement, allowing the Christian Democratic Union (CDU), Christian Social Union (CSU), and Social Democratic Party (SPD) to form a new government. This coalition follows February's elections, where the CDU/CSU emerged as the leading bloc but failed to secure an outright majority, while the far-right Alternative für Deutschland (AfD) significantly increased its support. The coalition agreement focuses on stabilizing Germany's economy, enhancing internal security, and addressing contentious issues around taxes and migration. CDU leader Friedrich Merz, poised to become Chancellor, faces pressure to avoid excessive concessions to the SPD, which came in third in the elections. With Germany on the brink of recession amid global trade tensions exacerbated by U.S. tariffs, the urgency to establish a government has intensified. The coalition deal is expected to be presented to party members for approval before taking effect.