BERLIN — German conservatives under Friedrich Merz have agreed a coalition deal with the center-left Social Democrats (SPD), aiming to revive growth in Europe’s largest economy just as a global trade war threatens recession.
The deal caps weeks of haggling between chancellor-in-waiting Merz and the SPD after he topped elections in February but fell well short of a majority, with the far-right Alternative for Germany surging into second place.
Pressure to reach a deal has taken on new urgency as the government will take charge at a time of global turbulence in an escalating trade conflict sparked by US President Donald Trump’s sweeping import tariffs.
The coalition is the only possible two-party majority that excludes the AFD whose support has surged on a nativist, anti-migration agenda.
In a blow to Merz, a survey by Ipsos released on Wednesday shows the AfD topping the polls for the first time with 25%, overtaking Merz’s conservatives who slip to 24%.
It follows another poll by the Forsa institute, which showed 60% of respondents said Merz was not fit to be chancellor, including 28% of CDU/CSU voters.
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