BERLIN — For Friedrich Merz, the challenging phase begins now as he embarks on coalition negotiations following the German elections.
The incoming conservative chancellor has initiated talks with the Social Democrats, fulfilling a long-standing desire of center-left parties by reaching a landmark deal that allows for hundreds of billions of euros in new borrowing to enhance Germany’s military and infrastructure, including essential investments in green energy.
For Merz, known for advocating fiscal discipline, this borrowing agreement marks a significant policy shift—one that the Social Democratic Party (SPD) readily supports. However, pressure is mounting on Merz from within his conservative alliance to obtain traditional right-wing policy concessions, especially regarding migration and welfare cuts.
The dilemma for Merz is that his fiscal pivot has already granted the SPD their primary wish—thus diminishing his negotiating power in coalition discussions.
“This is a clear defeat for the conservatives, right at the start of the [coalition] negotiations,” stated Johannes Winkel, leader of the conservative alliance’s youth organization, in a radio interview following the agreement on the borrowing deal. “The question is, of course, what is the quid pro quo for this major concession in financial policy.”
Merz’s newfound vulnerability to criticism from his right is particularly troubling for a chancellor who aims to steer the Christian Democratic Union (CDU) further right, countering the centrism of former Chancellor Angela Merkel. His agreement with the SPD and Greens on spending could be perceived as a continuation of Merkel’s policies.
The far-right Alternative for Germany party (AfD), poised to become the largest opposition party when the new Bundestag meets, is attempting to exploit this situation by depicting Merz as a hidden leftist.
“What do you actually stand for, Mr. Merz?” questioned Tino Chrupalla, one of the AfD’s leaders, in parliament last week. “By now, you have the mRNA of the SPD implanted in you.”
Key Points of Contention
Merz faces increasing pressure to fulfill his campaign promises, particularly regarding migration and cuts to social spending, issues he identified in a recent interview as significant sticking points.
The SPD has fundamental disagreements with him on these topics and little incentive to compromise, especially now that Merz has already granted them their major wish regarding borrowing. Another critical issue for Merz is the growing influence of radical parties on both sides of the political spectrum, leaving him with no viable coalition alternatives since he has ruled out collaboration with the AfD.
This situation confines him to negotiations with the SPD, whose leaders are determined to leverage this reality, pledging to uphold social benefits and support for their core labor constituents.
“I want to make one thing clear,” Lars Klingbeil, one of the SPD’s chief negotiators, remarked recently. “Anyone who says state modernization but actually means dismantling employee rights is firstly making a mistake and secondly has the Social Democrats very clearly against him.”
Emerging as an even larger point of contention is migration, a key issue in the recent election campaign.
In the weeks leading up to the elections, Merz adopted a tough stance on migration to regain voters who shifted to the AfD. He pledged to implement strict border controls on his first day in office and to reject all irregular entries, including asylum seekers.
The SPD contends that such measures would violate EU law, provoke neighboring countries, and undermine European solidarity, particularly as Germany seeks to confront U.S. President Donald Trump on tariffs. Many within the SPD oppose a proposal to revoke German citizenship for individuals with dual nationality found to hold extremist or antisemitic views, arguing it unfairly targets dual citizens. Philipp Türmer, chairman of the SPD youth organization, labeled this proposal as an “absolute deal-breaker.”
“Look at the conservatives’ demands regarding migration,” Lars Castelluci, a SPD parliamentarian and deputy chairman of the interior committee in the Bundestag, told POLITICO. “That will be very, very difficult.”
Portraying the historic debt deal as an “SPD victory” that entitles the CDU to a blank check for its demands “is a game we will not play,” Castelluci added. “It’s indecent to impose that on us and demand a price for it.”
The ongoing disagreements threaten to delay the formation of Germany’s coalition government amid complex negotiations involving 16 groups with 256 negotiators. Initially, Merz suggested that talks would conclude by Easter, but he has since expressed uncertainty about that timeline. “Thoroughness comes before speed,” he remarked last week.
“We will need to implement substantial reforms,” the chancellor-elect stated in a recent television interview. “And that will be the true test of cooperation between the conservatives and the SPD.”
He added a note of caution, stating, “The really difficult discussions are still ahead.”
