Berliner Boersenzeitung - Germany's Merz to launch new govt in times of Trump turbulence

As US President Donald Trump has upended long-standing security and trade ties and reached out to Russia to end the Ukraine war, Merz has vowed to strengthen Berlin's role in Europe as it responds to increasingly turbulent times.

"Germany is back on track," the 69-year-old confidently said in a message to Trump weeks ago after his CDU/CSU alliance agreed to jointly rule Germany with the centre-left Social Democrats (SPD) of outgoing Chancellor Olaf Scholz.

But he faces a mountain of challenges from day one, including the rapid rise of the far-right and anti-immigration Alternative for Germany (AfD) party, which took second place in February's election and has won strong support from Washington.

In a session from 9:00 am (0700 GMT) Merz will seek a majority in the 630-seat Bundestag to become modern Germany's 10th chancellor.

Once confirmed by President Frank-Walter Steinmeier, he is then set to deliver the oath of office at noon.

His new government has already secured hundreds of billions of euros in fiscal firepower under a spending "bazooka" passed by the outgoing parliament, meant to rebuild crumbling infrastructure and the long-underfunded military while boosting an economy which has shrunk for two years.

The alliance of Germany's two big-tent parties has said Germany would continue to support Ukraine as the United States looks to encourage a deal to end the war started by Russia's invasion over three years ago.

Trump has heaped pressure on European allies, accusing them of spending too little on NATO and taking advantage of the United States through running trade surpluses, threatening tariffs especially painful to export power Germany.

- 'Marathon on a tightrope' -

Merz has also vowed to curb irregular migration and deploy extra police to secure Germany's borders, putting an end to the open-door policy that welcomed millions of migrants under his party rival, ex-chancellor Angela Merkel.

Merz has warned only such drastic steps will prevent the AfD from potentially coming out on top in elections in four years' time.

The stakes were heightened when Germany's domestic intelligence service last Friday designated the AfD as "right-wing extremists", reviving debate on whether the government should seek to ban the more than ten-year-old party.

This sparked a furious response from Trump allies who have supported the AfD, with US Secretary of State Marco Rubio accusing the German spy agency of "tyranny in disguise".

"In this moment of geopolitical crisis, chancellor Merz will have to run a marathon on a tightrope," said political analyst and author Michael Broening who serves on the SPD's Basic Values Commission.

"The stakes are high. One misstep could spell collapse -- and Germany's far right is poised to pounce on even the slightest wobble."

Merz, who boasts a strong business background but has no experience in a government leadership post, on Monday said "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.

The chancellor-in-waiting also promised "a government whose voice is heard in Europe and the world". His first trip on Wednesday will take him to Paris, followed by a Warsaw visit.

"The end of the power vacuum at the heart of Europe is a major positive on its own," wrote analyst Holger Schmieding of Berenberg Bank. "Although we do not expect a policy revolution, Merz will likely make a difference.

"With his strong transatlantic, pro-European and pro-Ukrainian convictions, we expect him to pursue a more forceful foreign policy, improve relations especially with France and Poland and have a better chance of getting along with US President Donald Trump."

(F.Schuster--BBZ)