Coalition Negotiations Nearing Conclusion

In the CDU headquarters, final discussions are taking place as coalition negotiations come to a close. Following nearly four weeks of intense discussions, representatives from the CDU, CSU, and SPD appear to be on the verge of reaching an agreement. Although discussions ended late at night after approximately 13 hours without a final consensus, sources indicate that the goal is to finalize an agreement by Wednesday afternoon. Talks are set to resume at 9:30 AM at the CDU party headquarters.

Throughout the day, leaders from the Union and the SPD worked tirelessly to find compromises, engaging in various formats of discussion punctuated by private consultations within their parties. The international situation and the U.S. government's tariff policies under President Trump have intensified the urgency for an agreement, with experts warning of potential recession risks and challenges for Germany's export-driven economy. In response, CDU leader Friedrich Merz aims to counter these pressures through proposals for reduced corporate taxes, decreased bureaucracy, and lower energy prices.

Following the Bundestag elections, the Union, having emerged as the dominant party, initiated exploratory talks with the SPD for coalition formation just five days after the results. The absence of viable alternatives, such as a black-green coalition lacking a majority or an outright exclusion of cooperation with the AfD, has made this negotiation path essential.

Shortly after the initiation of discussions on March 4, the CDU, CSU, and SPD agreed on a historically significant financial package for defense and infrastructure. The previous Bundestag passed constitutional amendments with a two-thirds majority to ease the debt brake on defense spending and establish a special fund of EUR500 billion for infrastructure and climate protection.

The exploratory talks concluded on March 8 with an eleven-page document recommending the commencement of formal coalition negotiations, which officially began on March 13. Sixteen working groups were formed to detail various topics within a tight timeframe. The outputs from these groups contained a mix of agreements and outstanding issues that the main negotiation team, consisting of 19 members, would address. Merz expressed frustration, suggesting that some working group discussions resembled a 'wish list.'

While documents from the working groups were made public, little information filtered out from the main negotiation rounds. Politicians involved in the negotiations did engage with the media, but specific details were scarce. The discussions alternated between the SPD and CDU party headquarters and the Bavarian representation in Berlin. Key issues such as tax system reforms and migration policies emerged as significant sticking points in the negotiations.

Within the CDU, dissatisfaction has surfaced amid the coalition talks. In response to Merz's shift in stance regarding the debt brake, a third of the CDU's city association in Kühlungsborn (Rostock district) resigned from the party. The Young Union has threatened to reject any coalition agreement that does not reflect the policy changes promised by Merz during the campaign. Similar discontent has been expressed in the Brandenburg CDU regarding the limited involvement of the party base in the negotiations, with the Potsdam-Mittelmark local association calling for a membership vote similar to that of the SPD.

As negotiations continue, SPD leader Lars Klingbeil left the CDU headquarters without making any statements. The pressure mounts as the Union faces declining poll numbers, having lost several percentage points since their 28.5% share in the Bundestag elections. The AfD is drawing closer in surveys, with some polls indicating they are nearly on par with the Union.

Looking ahead, should an agreement be reached, the SPD plans to conduct a digital vote among its members within ten days. For the CDU, a small party congress will decide on the coalition agreement, while the CSU will finalize it with a board resolution. Initially, Merz aimed to form a government by Easter, a target that is no longer feasible. The new potential date for his election and inauguration as Chancellor is now set for May 7.