The Digester

Little Coalition: Merz Faces Uphill Battle as Union and SPD Begin Fragile Talks

Mar 20th 2026

Friedrich Merz’s CDU/CSU and the SPD have a slim Bundestag majority and face tense negotiations over migration, defense spending, taxes and social policy while the AfD gains ground in many eastern districts.

  • The Union (CDU/CSU) and SPD together hold a narrow 13-seat majority after the Feb 23 vote, totaling about 45 percent of the vote.
  • Friedrich Merz and SPD leader Lars Klingbeil must bridge personal distrust and party differences to form a stable government.
  • Migration will be a major flashpoint, with Merz campaigning for border rejections and the SPD rejecting permanent closures.
  • Defense spending is urgent as the 100 billion euro special fund runs out in 2027 and NATO commitments may require much higher annual budgets.
  • Tax, pension and welfare disputes are expected, including conflicts over Bürgergeld, minimum wage, inheritance and corporate tax cuts.
  • If the coalition falters, the right-wing AfD could strengthen further and potentially become Germany's largest party in parts of the east.
  • Internal CDU and CSU pressures from regional leaders like Wüst and Söder complicate Merz’s negotiating room and the coalition timeline.

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