Government statement: Merz promises "prosperity for all" and a larger army

In his first government statement, Chancellor Friedrich Merz (69) called for a joint effort by all people in Germany to move the country forward again. "The state is all of us," he said in the Bundestag. "We can overcome all challenges, no matter how great, through our own strength."

Specifically, the CDU leader announced increased deportations of foreigners without residency rights. He wants to make the Bundeswehr the strongest conventional army in Europe and promised "prosperity for all." The first results of the new government's desired policy change should be noticeable by the summer.

The opposition, however, criticized the start of the CDU-Red coalition. "Weakness and instability are the signals emanating from your historic false start, Mr. Merz. You are the second-choice chancellor. And you will never be able to shake off this stigma," said AfD leader Alice Weidel (46), chairwoman of what is now the largest opposition faction.

Merz was elected Chancellor in the second round of voting on May 6. A little over a week after his stumbling start, he presented his program for government work with the SPD. He largely adhered to the 144-page coalition agreement he negotiated with the Social Democrats.

His government is aware of the major domestic and international challenges – "not least with regard to public finances," the Chancellor said. However, Germany is strong enough to meet the challenges ahead.

Merz named three priority goals: prosperity, security, and cohesion. He revived a promise from the early years of the Federal Republic: "We want to govern to renew the promise of 'prosperity for all,'" he said at the very beginning of his speech. This promise originated with Ludwig Erhard, who served as Minister of Economics and Chancellor in the post-war period, represented the "economic miracle" of the time, and wrote a book entitled "Prosperity for All."

Merz promised better conditions for the economy: with tax relief, investments in infrastructure, and less bureaucracy. "We can, through our own efforts, once again become a growth engine that the world will look upon with admiration," he said. The government will remain committed to the German, European, and international climate targets. However, the focus will be on pricing the greenhouse gas CO2. "We will not collect the revenue from this in the state budget, but will return it specifically to the economy and the citizens," Merz promised.

While Merz emphasized that Germany is a country of immigration, he simultaneously announced more deportations. "We have allowed too much uncontrolled immigration and facilitated too much low-skilled migration into our labor market and, above all, into our social security systems," he said, looking back on the years since 2015. With intensified border controls and more rejections, he said, more order will now be ensured in migration policy.

In his speech, the Chancellor also addressed the expectations of Germany's allies. "Today, this Europe is looking to us, to Germany," he said. Merz promised continued strong support for Ukraine. "One thing is clear: We are not a party to the war and we will not become one," the CDU leader assured. The West must not allow itself to be divided in the process. "Therefore, I will continue to make every effort to continue to achieve the greatest possible unity between our European and American partners." Like previous governments, Merz considered Israel's security to be a matter of German state policy.

Merz wants to make the Bundeswehr the strongest conventional army in Europe. This is expected by our partners and is also appropriate for Europe's most populous and economically powerful country. "We want to be able to defend ourselves so that we don't have to defend ourselves," the CDU politician stated.

Merz urged caution regarding the federal government's new borrowing options. "We must handle these options with extreme caution, because these debts trigger interest payments, and they will have to be repaid one day," he said. Loans can therefore only be justified "if we use this money to permanently and sustainably increase the value of our infrastructure and improve our country's overall performance."

The coalition government of the Christian Democratic Union (CDU/SPD) plans to use up to 150 billion euros from the debt-financed infrastructure fund during this legislative period. The fund is to be filled with a total of 500 billion euros, but is designed to run for twelve years.

Merz rejected legal requirements for raising the minimum wage to €15. The coalition has agreed to maintain the independent minimum wage commission, the CDU politician said in his government statement. And, given the current collective bargaining situation, they consider a minimum wage of €15 in 2026 to be achievable and desirable. "But we will not enshrine it in law," Merz emphasized.

In doing so, Merz adhered to the wording in the coalition agreement, but contradicted a proposal by the SPD. Social Democrat Matthias Miersch (56) had pointed out in April that a 15 euro minimum wage could also be achieved by law if necessary.