Friedrich Merz, Germany’s incoming chancellor, announced some of his first cabinet selections on Monday, naming utility executive Katherina Reiche as his pick for economy minister and foreign affairs expert Johann Wadephul as the next foreign minister.
The appointments come after Merz’s center-right CDU/CSU bloc, which emerged victorious in February’s election, secured a coalition agreement with the center-left SPD earlier this month. The new government is being formed amid pressing global challenges and aims to rejuvenate the economy and bolster Germany’s position on the world stage.
A key objective for the coalition is to reignite growth in Europe’s largest economy, which faces headwinds from global trade tensions and U.S. tariffs. The government also plans to raise defense spending in response to growing geopolitical instability and strain within NATO.
Merz intends to lead a more united and decisive administration, contrasting with the previous coalition under Olaf Scholz, which struggled with internal disputes and ultimately collapsed late last year. Even before Merz formally takes office, he and the SPD have already pushed through a landmark fiscal package to expand infrastructure and military funding.
Under the coalition deal, the CDU will oversee the economy and foreign ministries, while the CSU will manage the interior ministry. The SPD will take charge of the finance and defense portfolios. Boris Pistorius is expected to retain his role as defense minister, while SPD leader Lars Klingbeil is widely tipped to become finance minister.
Economic Agenda
The coalition’s platform includes tax relief for lower and middle-income earners, reduced corporate taxes, lower energy costs, support for electric vehicles, and plans to scrap a contentious supply chain regulation. Amid growing pressure from the far-right AfD, the government is also promising a firmer approach to migration, alongside continued support for Ukraine and an increase in military investment.
Reiche, currently CEO of energy infrastructure firm Westenergie and a former head of a national utilities association, is regarded as a capable leader with deep experience in the sector. She succeeds Robert Habeck, who was often criticized for his handling of economic issues during the energy crisis.
Wadephul, a long-standing lawmaker and deputy leader of the CDU/CSU in parliament, will take over the foreign ministry from Annalena Baerbock. His alignment with Merz could lead to more consistent and assertive foreign policy, particularly in dealings with the U.S., China, and Russia.
Focus on Digitalisation
Recognizing the need to modernize Germany’s digital infrastructure, the coalition has created a new ministry for digital affairs to be led by Karsten Wildberger, a seasoned business executive. The move has been hailed as a significant step toward improving the country’s technological competitiveness.
Additionally, CSU’s Alexander Dobrindt will take the helm of the interior ministry, signaling a shift toward stricter immigration policies in response to the AfD’s growing popularity.
The SPD will finalize its ministerial nominations after an internal vote, with results expected by Wednesday. Merz is slated to be officially sworn in as chancellor on May 6.
