Alliance agreement signed - Union and SPD vow collaboration

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Germany's Big Three Leaders Ink Coalition Deal, Promise Prosperity and Progress

In a historic moment, the heads of the CDU, CSU, and SPD put pen to paper on a coalition agreement yesterday, vowing to work together for the betterment of Germany in the upcoming years.

Friedrich Merz, the new CDU leader, set to take the helm as Chancellor on Tuesday, expressed the gravity of the task ahead, saying, "We understand the burden of history that rests on our shoulders, and we're committed to making this coalition a success. This agreement we sign today demonstrates our serious intent, our focus, and our awareness of the issues at hand."

Lars Klingbeil, SPD leader and the designated vice-chancellor, echoed similar sentiments, focusing on the international challenges that lie ahead. "Now, it's upon us, the incoming government, to craft this new global landscape, to shape the changes, or to simply watch and potentially be molded by them," he warned.

Before the ceremony at the Gasometer of the Euref-Campus in Berlin, the SPD had already unveiled its cabinet members, making them the last of the three coalition parties to do so. The negotiators who brokered the agreement between the Union and the SPD were lauded at the signing of the coalition pact.

Merz, Klingbeil, and CSU leader Markus Söder all emphasized their intention to woo the citizens with reforms and investments. "We're going to invest now, and ease the burden tomorrow," said Klingbeil, referencing the Finance Ministry. "Our primary focus is economic strength." Despite the surprisingly amicable collaboration during the coalition negotiations, Söder expressed his resolve to keep an eye on the bigger picture from Bavaria to ensure the new alliance doesn't lose sight of the forest for the trees.

Söder, as well as SPD co-leader Saskia Esken, spoke fervently about the need to curtail the influence of the right-wing populist AfD. "Populist, illiberal, and anti-democratic ideologies threaten our democracy, they threaten the unity of our country," Esken asserted. Since the AfD, the largest opposition party in the Bundestag, has been classified by the domestic intelligence agency as securely right-wing extremist, she views it as the "foremost obligation of all democrats, both in parliament and beyond, to quell this right-wing extremism."

Söder also touched upon the AfD, stating that both the coalition agreement and the cooperative spirit it fosters will empower them to write a "strong chapter" in German politics. "Rather than fearing others, we should instead concentrate on what we can do," he concluded.

(Coverage provided by Andreas Rinke and Markus Wacket; edited by Christian Goetz. For further inquiries, please contact our newsroom at [email protected] for politics and economics, or [email protected] for companies and markets.)

Insight:

This new German coalition pact between CDU/CSU and SPD, finalized on April 9th, 2025, heralds the 21st legislative period. Focusing on economic revitalization, administrative reforms, and social cohesion, the agreement also implements a strategy to counter the right-wing populist AfD. The key elements include corporate tax cuts, investment incentives, labor flexibility, supply chain act suspension, yearly deregulation acts, public procurement simplification, federal experimental law, minimum wage increase, pension reforms, stronger trade union rights, EU alignment, enhanced anti-tax evasion measures, and no direct engagement with the AfD.

In the upcoming months, prioritized initiatives include the Chancellor election (Friedrich Merz, CDU), legislative focus on administrative simplification and labor-law amendments, and advocacy for unified EU responses to global challenges.

The coalition deal, signed between the CDU, CSU, and SPD on April 9th, 2025, marks the beginning of the 21st legislative period in Germany.
The agreed policies focus on economic revitalization, administrative reforms, and social cohesion, aiming to counter the influence of the right-wing populist AfD.
Key elements of the agreement include corporate tax cuts, investment incentives, labor flexibility, supply chain act suspension, yearly deregulation acts, public procurement simplification, federal experimental law, minimum wage increase, pension reforms, stronger trade union rights, EU alignment, enhanced anti-tax evasion measures, and no direct engagement with the AfD.
Planned initiatives for the following months include Friedrich Merz's election as Chancellor, a legislative focus on administrative simplification and labor-law amendments, and advocacy for unified EU responses to global challenges.