German SPD backs coalition, paving way for chancellor Merz

Michael Nienaber, Bloomberg News on Apr 30, 2025

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Germany’s Social Democrats backed the coalition deal with Friedrich Merz’s conservatives, clearing the way for the center-right leader to be confirmed as chancellor next week.

About 85% of SPD members who participated in the online ballot voted in favor of the blueprint for government agreed this month with Merz’s CDU/CSU alliance, the party said Wednesday in Berlin.

The SPD leadership also formally approved a plan for co-head Lars Klingbeil to oversee the selection of the party’s ministers, according to people familiar with the decision. Under the plan, Klingbeil would become finance minister and Merz’s deputy as vice chancellor, said the people, who asked not to be identified before a public announcement due Monday. Current SPD Defense Minister Boris Pistorius is also expected to remain in his role.

“The SPD is ready to take on responsibility in the next government,” Matthias Miersch, the party’s general secretary, said at a news conference in Berlin. “It’s about setting the right path to take Germany forward and above all about investing in the future of this country.”

Of the roughly 360,000 SPD members, just 56% took part, with 15% voting against the accord. The party’s youth wing, which accounts for just over 10% of the membership, had led internal opposition to the agreement, which it considers flawed in policy areas like migration and pensions, but failed to muster enough support to block it.

To help revive economic growth, Merz campaigned for lower taxes and budget consolidation, but abandoned his hawkish fiscal stance shortly after the Feb. 23 election to pass constitutional changes that will unlock hundreds of billions of euros in debt for defense and infrastructure investment. He’s also promised to clamp down on migration and rein in Germany’s bureaucracy.

On foreign policy, Merz aims to take a more active role in Europe in contrast to the more tepid approach of his SPD predecessor, Olaf Scholz. Once he is sworn in, he is expected to travel to Paris and Warsaw to meet fellow European Union leaders Emmanuel Macron and Donald Tusk. He’s also likely to soon visit Kyiv to reinforce Germany’s backing for Ukraine in its defense against Russia’s invasion.

The 69-year-old is due to be voted in by Bundestag lawmakers next Tuesday, after which he’ll take his oath of office along with the members of his cabinet.

The Christian Democrats and their Bavarian sister party, the CSU, have already nominated their 10 ministers, while the SPD is expected to confirm its seven, including Klingbeil and Pistorius, on Monday. The parties will also sign the coalition deal that day at an event in Berlin.

A former corporate lawyer with no experience in government, Merz is set to take over the running of Europe’s biggest economy at a time of domestic and geopolitical turmoil.

His approval rating is only at around 36% and support for the parties in the next government has slumped in opinion polls, with combined support at about 40%. The far-right Alternative for Germany has become the strongest force in some polls, increasing the pressure on Merz to act fast.

“How quickly the new government draws up the budget — and whether it will be passed before the summer break — will be decisive” for bolstering the economy, said Marion Muehlberger, economist and political analyst at Deutsche Bank Research.

Germany’s gross domestic product has shrunk the past two years and is in danger of doing so again this year. In the first quarter, the economy grew by 0.2% from the previous three months, the statistics office said on Wednesday, but more challenging times are ahead as the impact from U.S. trade levies has yet to be fully felt.

As well as restoring economic growth, coalition officials have pledged to strengthen the military and domestic security in the face of Russian aggression and tackle irregular migration, a key concern among AfD voters.

While it’s still unclear how the trade conflict will affect export-dependent Germany, a giant investment package the conservatives and the SPD secured last month with the support of the Greens is expected to help propel growth next year to around 1%.

Merz will lead a so-called “Grand Coalition” with the SPD, the fifth such alliance since World War II — three of them under former conservative Chancellor Angela Merkel. The last time the SPD gave members a vote on a coalition deal was in 2018 before they joined Merkel’s government as junior partner.

Merz’s center-right bloc didn’t hold membership ballots on the coalition deal, which was approved instead by party officials.

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With assistance from Arne Delfs, Kamil Kowalcze, Zoe Schneeweiss and Christoph Rauwald.