By Andreas Rinke and Sarah Marsh
BERLIN (Reuters) -Germany’s Chancellor-in-waiting Friedrich Merz on Monday named utility executive Katherina Reiche as his likely economy minister and foreign policy expert and ally Johann Wadephul as foreign minister, as part of a raft of first appointments.
Merz’s CDU/CSU conservatives, who topped February’s elections, clinched a coalition deal with the centre-left Social Democrats (SPD) earlier this month, as they race to form a new government to deal with an array of global crises.
The two parties aim to revive growth in Europe’s largest economy just as a global trade war sparked by U.S. President Donald Trump’s sweeping import tariffs threatens recession and to ramp up defence amid strains in the transatlantic alliance.
Merz hopes that his government will be able to avoid the infighting that plagued the three-party coalition of his Social Democrat predecessor Olaf Scholz – and eventually led to its collapse last November – and that it can prove more decisive.
Even before taking office, Merz and the SPD managed to push a historic fiscal package through parliament that will enable the next government to drastically boost spending on infrastructure and defence.
The coalition deal accorded Merz’s Christian Democrats (CDU) the economy and foreign ministries, their Bavarian sister party the Christian Social Union (CSU) the interior ministry and the SPD the defence and finance ministries.
ECONOMY PLANS
The new coalition’s plans include cutting taxes for middle and lower income Germans, reducing a corporate tax, lowering energy prices, supporting the electric car industry and scrapping a disputed supply chain law.
With the far-right Alternative for Germany (AfD) breathing down its neck, the coalition has signalled a tougher stance on migration. It has also vowed strong support for Ukraine and higher defence spending as Europe faces a more hostile Russia.
Reiche, a former lawmaker, has been CEO of regional energy infrastructure firm Westenergie – a division of E.ON, Europe’s largest operator of power grids – since early 2020.
Reiche, 51, served as a member of Germany’s parliament from 1998 until 2015 and held roles as parliamentary secretary at the environment and transport ministries.
Prior to her current role, Reiche – who sits on the supervisory board of automotive supplier Schaeffler – was the chief executive of Germany’s VKU association of local utilities.
She takes over from Robert Habeck of the Greens, who held the economy portfolio during Europe’s energy crisis and Russia’s invasion of Ukraine.
Wadephul, a member of Germany’s parliament since 2009, is deputy leader of the CDU/CSU conservative faction in parliament responsible for foreign and defence topics.
He will succeed Annalena Baerbock of the Greens in the position, who often dissented on foreign policy from Chancellor Olaf Scholz from the SPD.
The fact the conservatives will hold both the chancellery and the foreign ministry, and that Wadephul is a Merz ally, indicates there will likely be a clearer German line on foreign policy, which allies will likely appreciate, say analysts.
“Merz has created the conditions and structures to be a very strong chancellor in foreign policy,” said Jana Puglierin, head of the Berlin office of the European Council on Foreign Relations think-tank. “He will be responsible for relations with the United States, China and Russia.”
The SPD will nominate its ministers after party members have approved the coalition deal in a vote, party leader Lars Klingbeil has said. The results of the vote are expected on Wednesday.
Merz is expected to be sworn into office on May 6.
(Reporting by Andreas Rinke and Sarah Marsh; Editing by Rachel More and Gareth Jones)
