Germany is set to usher in a new era of leadership as the centre-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), have reached a coalition agreement with the centre-left Social Democratic Party (SPD). The landmark deal follows weeks of negotiations and will be formally presented in a joint press conference on Wednesday afternoon.

Under the agreement, CDU leader Friedrich Merz is expected to become Germany’s next chancellor, succeeding Olaf Scholz and marking a significant political shift in Europe’s largest economy. The coalition ends a period of uncertainty and political drift that followed the closely watched federal elections held in February.

Merz’s CDU-CSU Union bloc emerged as the strongest force in the elections, but without a clear majority. In the aftermath, Merz initiated talks with the SPD to secure a stable parliamentary coalition capable of forming a government.

“We have reached a comprehensive agreement that reflects both our common goals and the diverse perspectives of our parties,” Merz said in a brief statement ahead of the official announcement. “Our focus now is on delivering strong, effective governance for Germany at home and abroad.”

The three parties are scheduled to unveil the full coalition deal during a press conference at 3:00 p.m. Central European Time. The agreement will outline the policy framework and key cabinet positions, and is expected to prioritize economic stability, energy transition, digital infrastructure, and Germany’s role in the European Union.

The SPD, led by outgoing Chancellor Scholz, has signaled its willingness to compromise to ensure political stability. Although the party suffered losses in the recent elections, it remains a major force in German politics and will likely retain several key ministries in the new coalition government.

“The people of Germany expect us to act responsibly and work together,” said an SPD spokesperson. “This coalition is the result of constructive dialogue and mutual respect.”

The coalition formation marks a return to a so-called “grand coalition,” reminiscent of earlier CDU-SPD partnerships that governed Germany for much of the past two decades. However, political analysts note that this iteration is taking shape under markedly different global and domestic conditions — including ongoing economic challenges, shifting geopolitical dynamics, and evolving voter expectations.

With the coalition agreement now in place, the Bundestag is expected to confirm Merz’s appointment as chancellor in the coming days. Once sworn in, he will face the immediate challenge of navigating Germany through global economic uncertainties and accelerating the country’s energy transition.

As anticipation builds for the official announcement, many observers see the coalition as a stabilizing force in an increasingly polarized European political landscape — one that could provide fresh momentum for Germany on both the domestic and international fronts.