Germany, agreement between Cdu-Csu and Spd on government programme

There will also be mid-term relief on personal tax, for low to middle income earners. There will also be relief on overtime.

Other measures include a cut in grid charges to lower energy costs, incentives for electric cars and the abolition of the controversial supply chain law, which has been severely criticised by businesses.

Diesel subsidies for farmers will be restored.

On immigration, a very sensitive dossier, naturalisation in three years, introduced in the previous legislature, is abolished: it is reverted to five years. Family reunification for refugees will be suspended for two years and the number of safe countries of origin, to which rejections can be carried out, will be increased. Merz wants to keep his election campaign promise of a decisive clampdown on irregular entry. The EU asylum rules, a red line drawn by the SPD, remain untouched.

The Cdu will have six ministers (besides the chancellor), the Csu three and the Spd seven.

To the Christian Democrats go Foreign Affairs, for the first time in almost 60 years, Economy and Energy, Education, Family, Elderly, Women and Youth, Health, Transport and the new Ministry for the Digitisation and Modernisation of the State.

The Csu will have Interior, Research, Technology and Space and Food, Agriculture and Housing.

Finance, Defence, Justice, Labour, Climate and Environment, Construction and Development go to the SPD. Lars Klingbeil, co-leader of the Social Democrats, is expected to become vice-chancellor and inherit Finance from party colleague Jörg Kukies. Boris Pistorius, Germany's most popular politician by far, is expected to remain at Defence.

Even before it led to a government agreement, the understanding between the Union and the SPD produced a historic breakthrough in Germany, with the constitutional reforms passed in record time in cooperation with the Greens, which unlocked hundreds of billions in infrastructure and defence investments. The exceptions to the debt brake were already approved in the old Bundestag, less than a month after the vote on 23 February.

The Schuldenpaket (debt package), as the German media have dubbed the ambitious spending programme, can turn into one trillion in public investment over 12 years, depending on how much Berlin allocates to defence. In this legislative period, 150 billion of the 500 billion in the extraordinary infrastructure fund will be spent. The public debt is projected to reach 80% of GDP and more, from 63% today.

The agreement on the Schuldenpaket, which was reached when the coalition negotiations had barely begun, simplified the agreement on the programme: by taking infrastructure and defence expenditure out of the budget, resources were freed up for the other economic dossiers. A huge asset, and an equal responsibility, to administer in order to lead Germany out of the economic crisis and to win back electoral consensus.

What has emerged is the fourth black-red coalition since 2005, the fifth in the post-war period. This time, however, one really cannot speak of a 'Grand Coalition': in the Bundestag the two formations have 328 MPs and a majority of just 13 seats.

The Cdu-Csu came out of the polls on 23 February as the first party in Germany, but with the second worst result since 1949, at 28.5% (208 seats), and is losing ground, so much so that Alternative für Deutschland is now joining it in a head-to-head contest at 25-24% of the vote. In the latest poll by the Ipsos institute, it is even ahead by one point, at 25%. 'For the first time, according to the polls, the Afd is the strongest party in Germany! The citizens want political change and not an 'everything as usual' coalition between Cdu-Csu and Spd!" commented party co-leader Alice Weidel. The ultra-right won 20.8% of the vote in February and is the second largest force in the Lower House, with 152 seats.

The approval rating for the next prime minister is also low: according to a survey by the Forsa institute, 60% of the respondents believe that Merz is not suitable to be chancellor. Among the Cdu-Csu voters themselves, 28% think this way.

The SPD even had its worst result ever in an election, with 16.4% of the vote and 120 seats. The black-red coalition only became possible because the Sahra Wagenknecht Alliance (Bsw) and the Liberals failed to enter the Bundestag, otherwise a third partner would have had to be involved and things would have been even more complicated. Bsw missed the 5% threshold by just over 13,000 votes.