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Merz Faces Mounting Pressure as Coalition Talks Near Crucial Phase

Germany's coalition negotiations intensify as market turmoil, internal dissent, and surging far-right support challenge Friedrich Merz's leadership and policy agenda.

Germany's chancellor-in-waiting and leader of the Christian Democratic Union party (CDU) Friedrich Merz, gives a statement on the day Christian Democratic Union party (CDU) and Social Democratic party (SPD) have exploratory talks, in Berlin, Germany March 28, 2025. REUTERS/Christian Mang/File Photo
Friedrich Merz (L) is expected to be Germany's next chancellor
Merz's talks for a coalition deal have been given greater impetus after Donald Trump blew up global trade

Overview

  • Friedrich Merz's coalition negotiations with the SPD are progressing, with leaders expressing cautious optimism for a deal by the end of the week.
  • Germany's main equity index dropped 10% following U.S. President Donald Trump's tariffs, adding urgency to the talks and highlighting the need to restore economic competitiveness.
  • Merz faces growing internal criticism from his conservative base, including the CDU’s youth wing, over perceived concessions to the SPD and policy reversals on fiscal discipline.
  • The far-right Alternative for Germany (AfD) has surged in polls, drawing level with Merz's CDU/CSU for the first time in post-war history, further complicating the political landscape.
  • Merz’s approval ratings have fallen sharply, with only 25% of Germans expressing support, as he seeks to balance coalition demands with his party's agenda.