Germany is poised to form a new government after Friedrich Merz, leader of the center-right Union bloc and winner of the February 23 election, finalized a coalition agreement with the center-left Social Democrats. The deal follows months of political uncertainty and will see Merz replace outgoing Chancellor Olaf Scholz in early May, pending party approvals and a parliamentary vote.

The coalition plans to prioritize economic revitalization, increased defense spending, stricter migration controls, and long-overdue modernization efforts — including the creation of a digitization ministry and plans to reduce bureaucracy.

Merz emphasized Germany’s renewed global engagement, stating, “Germany is back on track,” with commitments to NATO and the EU. The agreement includes major reforms such as loosening fiscal rules to fund infrastructure and defense, tightening citizenship laws, and reducing the size of the federal workforce.

The early election was triggered by the collapse of Scholz’s coalition last November. Rising pressure from both domestic political shifts and U.S. tariff threats helped push the parties to swiftly conclude negotiations.