Key points in Merz's plan to get Germany 'back on track'

Germany's incoming government will have a long to-do list when it takes office, between getting Europe's largest economy rolling again and navigating a turbulent international order stirred up by US President Donald Trump.

Chancellor-in-waiting Friedrich Merz's conservative CDU/CSU alliance and the centre-left Social Democrats on Wednesday presented their plan to get the country "back on track".

The agreement between the parties, which comes after weeks of negotiations, will provide a roadmap for the new coalition, which is expected to assume office after a parliamentary vote in early May. Four key points from the draft text:

Before the parties had put pen to paper on their coalition agreement, they already cleared the way for a massive defence spending boost to modernise the armed forces.

The refurb should prepare Germany to better face down the threat from Russia with US security guarantees to Europe looking increasingly uncertain.

With the extra fiscal space they granted themselves, the parties said they wanted to "significantly" boost defence spending, with the exact sums tied to NATO's capability requirements.

Despite jitters among European partners caused by Trump's administration, the NATO defence alliance was a "pillar of the transatlantic relationship" and "indispensable", they said.

Germany would also keep up "comprehensive support" for Ukraine to defend itself against Russia and support its position in any future negotiations with Moscow over an end to the war.

At home, the government would reintroduce military service on an "initially voluntary basis" that would "permanently increase willingness to serve" in the Bundeswehr.

After two straight years in recession, the incoming government wants to put life back into Germany's struggling economy even as Trump's tariff moves have sparked global turmoil.

In their agreement, Merz and his coalition partners underlined the need to "avoid a trade war" with the United States, saying they hoped for moves to reduce import taxes on both sides of the Atlantic.

At home, the new government wants to jumpstart the economy with a mix of targeted investments, lower taxes and reduced red tape.

Corporation tax will be cut from 2028 by a total of five percentage points in one-point increments. Energy will be kept affordable for industry with lower electricity taxes and grid fees.

Likewise, the costs imposed on business by German bureaucracy should be lowered by 25 percent a saving of 16 billion euros by the parties' calculations.

Having already tinkered with Germany's spending rules, the coalition partners plan a more thorough review to "modernise" the so-called debt brake, which restrains government outlays.

Merz said on the campaign trail his first priority would be to tackle irregular migration, promising a "zero tolerance" approach to retake control of Germany's borders.

The agreement hammered out between the parties pledges to reject immigrants including asylum seekers at the border "in coordination with our European neighbours".

Fixed controls on Germany's external borders will remain in place until European immigration rules are suitably reformed, per the draft text.

The parties are also planning a "deportation offensive", promising measures to remove those whose asylum requests have been denied, including with temporary imprisonment.

At the same time, "the fundamental right to asylum remains inviolable", Social Democrats co-leader Lars Klingbeil said at a press conference.

The new government will commit to Germany's target to reach net-zero emissions by 2045, with an approach that balances "climate protection economic competitiveness".

"We want to remain an industrialised country and become climate neutral," the agreement proclaims.

Most of this would be achieved through reductions in CO2 emissions but "negative emissions" such as carbon capture systems would contribute.

The parties supported carbon pricing in Germany and Europe but stressed that the scheme would need to retain "social acceptance" and that prices should remain "economically tolerable".

The parties also promised to reintroduce consumer incentives to buy electric vehicles a measure that could support emissions targets and help the domestic auto industry.

The future coalition partners launched some unexpected projects in the draft coalition agreement, including a cabinet minister with a space brief.

Merz's government has given itself the target of putting a German on the moon, strengthening the country's space industry and developing sovereign satellite systems.

The future chancellor had also criticised moves by the outgoing government to liberalise access to cannabis, saying the legalisation would be reviewed later this year.

bur-sea/fz/gv

This article was generated from an automated news agency feed without modifications to text.