Media: German chancellor faces growing challenges as coalition talks stall over key issues

Incoming German Chancellor Friedrich Merz is under mounting pressure as coalition talks with the Social Democrats (SPD) hit significant roadblocks, particularly over policy concessions on migration and welfare cuts.

The conservative leader, who has long advocated for fiscal discipline, made a historic policy reversal by agreeing to a deal that allows for hundreds of billions of euros in new borrowing to strengthen Germany's military and infrastructure, including green energy initiatives, Caliber.Az reports via foreign media.

While the deal was a major win for the SPD, which has long championed increased public spending, Merz now faces criticism from his own conservative alliance. Many within his party view the agreement as a strategic loss. “This is a clear defeat for the conservatives, right at the start of the [coalition] negotiations,” said Johannes Winkel, leader of the conservative alliance’s youth organization. “The question is, of course, what is the quid pro quo for this major concession in financial policy?”

Merz’s pivot on fiscal policy has diminished his leverage in negotiations, especially as he now needs to secure right-wing concessions on migration and welfare cuts. However, with the SPD having already gained its primary wish on borrowing, it remains less inclined to make significant compromises on other issues.

The tension is further compounded by Merz's political positioning. He had previously pledged to shift his Christian Democratic Union (CDU) further to the right, countering the centrism of former Chancellor Angela Merkel. Yet, this borrowing deal with the SPD and the Greens risks painting Merz’s leadership as too centrist, with far-right parties like the Alternative for Germany (AfD) already accusing him of being a “closet leftist.”

Migration, a key issue in Merz's campaign, continues to be a sticking point. He promised to implement strict border controls and reject irregular entries, including asylum seekers, from his first day in office. However, the SPD strongly opposes these policies, arguing they violate EU law and European solidarity. “That will be very, very difficult,” said Lars Castelluci, a SPD parliamentarian, referring to the CDU's demands on migration.

With no viable alternative coalition partner and mounting disagreements within his own ranks, Merz faces a challenging road ahead. “The really difficult talks are still ahead,” Merz acknowledged last week. As coalition negotiations drag on, the formation of Germany’s next government remains uncertain, with Merz and the SPD at odds over several key issues.

By Vafa Guliyeva