Berliner Boersenzeitung - German coalition deal signed on eve of Merz govt launch

Merz, 69, is on Tuesday set to be sworn in as the new leader of Europe's biggest economy, ending half a year of political paralysis in Berlin.

The CDU/CSU alliance of Merz and their future junior partners the Social Democrats (SPD) have vowed to revive the ailing economy and rebuild the military at a time when US President Donald Trump has cast doubt on the future of transatlantic security and trade ties.

Merz has also vowed to curb irregular migration and halt the rise of the anti-immigration Alternative for Germany (AfD) party, which took second place in February's snap general election.

The AfD was Friday designated a "right-wing extremist" party by Germany's domestic intelligence service -- a move that has stoked a fresh row with the Trump administration, and against which the AfD launched legal action on Monday.

US Vice President JD Vance described the AfD -- which like Trump has campaigned against immigration -- as "the most popular party in Germany". Secretary of State Marco Rubio called the German intelligence agency's move "tyranny in disguise".

Since February's election the AfD has been running neck-and-neck with the CDU/CSU in opinion polls, and occasionally leading.

Merz, who boasts a strong business background but has no experience in a government leadership post, at Monday's signing ceremony pledged "strong, well-planned and dependable governance".

"We live in times of profound change, of profound upheaval ... and of great uncertainty, and that is why we know that it is our historic obligation to lead this coalition to success," he said.

- 'Full-steam ahead' -

The 144-page coalition contract entitled "Responsibility for Germany" lays out a policy roadmap for the next four years of the coalition between the country's two traditional big-tent parties.

The chancellor-in-waiting said the incoming government "is determined to move Germany forward with reforms and investments" and also promised "a government whose voice is heard in Europe and the world".

His first trip on Wednesday will take him to Paris.

The SPD's Lars Klingbeil, the designated vice chancellor and finance minister, said that "the new government needs real teamwork more than ever".

Klingbeil said the priority must be to strengthen the economy, which shrank for the past two years, while SPD co-chair Saskia Esken emphasised the need to restore "trust in democracy".

CSU leader Markus Soeder, Bavaria's state premier, said the new government must start "full-steam ahead" and "convince through performance".

The outgoing coalition government of SPD Chancellor Olaf Scholz collapsed last November 6, the day Trump was re-elected to the White House.

Scholz himself will not be part of the new cabinet but stay on in parliament as a lawmaker.

A military ceremony on Monday evening will mark the end of his term as chancellor.

The SPD on Monday also formally announced its ministers for the new government, with Defence Minister Boris Pistorius set to remain in the post, in which he has overseen strong military backing for Ukraine against Russia.

SPD figures will also lead the ministries of construction, development, environment and justice.

Germany's lower house of parliament will convene from 9:00 am (0700 GMT) on Tuesday for a session in which lawmakers are expected to elect Merz as the 10th chancellor of modern Germany.

After the German head of state, President Frank-Walter Steinmeier, confirms the vote, Merz is scheduled to deliver the oath of office at noon (1000 GMT).

(Y.Yildiz--BBZ)