A coalition deal in Germany has paved the way for conservative leader Friedrich Merz to become the country’s 10th chancellor since World War II. As part of the deal, outgoing Chancellor Olaf Scholz’s party, the Social Democrats (SPD), will join with Merz’s Christian Democratic Union (CDU).

Both parties in the agreement have ruled out governing with the far-right party Alternative for Germany (AfD).

Friedrich Merz is expected to become Germany’s next leader after the center-right Christian Democratic Union and the center-left Social Democrats reached a deal to form a new German government. (Michael Kappeler/dpa via AP)

CDU/CSU and SPD are looking to invest in Germany’s infrastructure, raise the minimum wage to $17.01 per hour and to cap rents, according to Reuters, which cited the coalition contract.

The coalition deal gives SPD several major positions, including the finance, justice and defense ministries, according to the AP. In total, SPD was able to secure seven ministry positions, DW reported. 

Germany’s chancellor-in-waiting and leader of the Christian Democratic Union party (CDU) Friedrich Merz and co-leader of the Social Democratic party (SPD) Lars Klingbeil attend a press conference after reaching an agreement on their coalition government in Berlin, Germany, April 9, 2025.  (REUTERS/Annegret Hilse)

Additionally, SPD leader Lars Klingbeil is set to become vice chancellor and finance minister — a key position as the country deals with the ramifications of President Donald Trump’s tariffs.

“In these very difficult times in global politics, we bear responsibility for our security, for economic growth, secure jobs and equal opportunities,” SPD General Secretary Matthias Miersch said, according to Reuters.

Merz celebrated SPD’s approval of the agreement in a post on X, which was translated by Reuters.

“The broad approval of our coalition agreement shows that the political center is capable of taking action and assuming responsibility. This clears the way for a strong government that will finally solve our country’s problems,” Merz wrote, according to a Reuters translation.