(Bloomberg) -- German conservative leader Friedrich Merz is almost certain to become chancellor, but first he needs to win over the Social Democrats, setting up tense negotiations to bridge their differences in areas like government borrowing and welfare spending.
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An alliance of Merz’s Christian Democrat-led bloc and the SPD — which slumped to its worst result since World War II in Sunday’s election — is the only viable path to power, strengthening the SPD’s bargaining position.
The other two-party option for Merz to secure a Bundestag majority would be an alliance of his CDU/CSU with the far-right Alternative for Germany, or AfD, which the 69-year-old has categorically ruled out.
“I am determined to hold constructive, good, swift talks with the Social Democrats,” Merz said Monday at a news conference after a party leadership meeting in Berlin.
“The world is not waiting for us, things continue to change rapidly,” he added, reiterating his goal to have his government in place within two months. “Germany needs an effective government with a parliamentary majority behind it, I think that’s in all of our interests.”
A revival of Germany’s so-called “grand coalition,” a combination Angela Merkel presided over in three of her four terms, might seem safe and familiar. But the rifts have widened since Merz took charge of the Christian Democrats in 2022 and dragged them to the right.
That was highlighted at the end of January, when the CDU leader defied the SPD by seeking to force a migration crackdown through parliament with AfD backing.
The Social Democrats need to regroup after their voter support tumbled by a third to 16.4%. With Chancellor Olaf Scholz stepping aside following his failed reelection bid, a new leadership team has started to take shape.
Defense Minister Boris Pistorius is set to play a significant role, alongside SPD Co-leader Lars Klingbeil, who has signaled that the party will take a tough stance in negotiations.
“Whether the SPD enters a government isn’t yet clear,” Klingbeil said at a news conference in Berlin.
“These are decisions that will be taken in the coming weeks and months but I would say very clearly that the ball is now in Friedrich Merz’s court,” he added. “Then the SPD members will decide.”