Merz and SPD Make Progress in Coalition Talks Ahead of Easter

By Andreas Rinke

BERLIN (Reuters) -German election winner Friedrich Merz's conservatives and the Social Democrats (SPD) have concluded preliminary talks on forming a coalition government, Merz told reporters on Saturday in a joint announcement alongside other party leaders.

In Germany, where coalitions are the norm, governments are typically formed in two phases, with parties first holding exploratory talks and then entering into formal coalition talks.

The two parties were racing for a deal before next week when they hope to push a loosening of Germany's borrowing limits through parliament to revive growth in Europe's largest economy and boost military spending.

Chancellor-in-waiting Merz wants to form a coalition by Easter and has warned it was "five minutes to midnight" for Europe to fend for itself against a hostile Russia, with the U.S. under President Donald Trump no longer seen as a reliable ally.

Merz's conservative CDU/CSU bloc and the SPD have haggled over issues such as migration and welfare payments, coming together after a bruising election campaign.

The two parties have also discussed the issue of equipping Ukraine with longer range Taurus missiles, which outgoing SPD Chancellor Olaf Scholz opposed but Merz supports under certain conditions.

In his opening remarks, Merz promised tougher measures to tackle illegal migration, including by turning away people at Germany's borders and expanding border controls. He also said Germany should be targeting 1%-2% economic growth and promised to lower energy costs to help businesses.

(Reporting by Andreas Rinke, Vera Eckert; writing by Matthias Williams, editing by Sharon Singleton)