German coalition deal reportedly agreed, with press conference this afternoon
Leaders of the German conservative and socialist parties have reportedly agreed on a coalition deal to form the next government, German media are reporting.
The German press agency dpa said that the leaders of the two parties will take part in a joint press conference 3pm German time (2pm UK) to present the result of their talks.
But the deal would still have to be approved by a vote of the SPD’s 357,000 members, whic is expected to take at least ten days, meaning CDU leader Friedrich Merz is unlikely to be formally confirmed as the next German chancellor before May.
Media speculations suggest the CDU/CSU will take the interior and foreign ministries, taking on the critical job of resolving the country’s migration crisis and finding Germany’s place in the world despite global uncertainty surrounding the new US administration.
Early reports suggest that the SPD, which led the outgoing government of Olaf Scholz, will keep the finance and defence portfolios, leaving the popular defence minister Boris Pistorius in the next cabinet.
This development is very timely as the far-right Alternative für Deutschland, has topped a federal voting intention poll for the first time in history (10:31), exploiting the political limbo amid global uncertainty (10:39).
Key events
Hungary to oppose EU retaliatory measures on US
Hungarian foreign minister Péter Szijjártó said Hungary would oppose the European Commission’s proposal to impose retaliatory tariffs on the US, warning that “escalation is not the answer.”
“Such measures would cause further damage to European economy and citizens by raising prices. The only way forward is negotiations, not retaliation,” Szijjártó argued.
But unlike with some other policies, Hungary’s opposition will not have no impact on the proposal here as there is no need for unanimity among the member states when it comes to trade decisions.
The package is still expected to be passed this afternoon.
China retaliates against US tariffs – business live
European leaders will be watching with interest – or more accurately, with growing horror – the escalating trade war between the US and China, after the Chinese ministry of finance said it will impose 84% tariffs on US goods from Thursday, up from the 34% previously announced, according to Reuters.
The move – and later comments by senior US officials suggesting that “everything is on the table,” including removing Chinese stocks from US exchanges – prompted all sorts of falls in the markets, and you can follow them live on our business blog here:
‘Half the place would be blown to bits’: the Irish villages under threat from Trump’s tariffs
Lisa O’Carroll
And here’s more from Lisa on the potential impact of Trump’s tariffs in Ireland –
Just across the bay from the historic town of Cobh, the last port of call for the Titanic in 1912 on her ill-fated maiden voyage, lies the source of some of the world’s biggest life-savers and givers.
Sildenafil, the active ingredient in Viagra, medicinal compounds for the treatment of cancer, rheumatoid arthritis, psoriasis, Crohn’s and Parkinson’s disease, all are manufactured within two miles of the deep port of Ringaskiddy in County Cork.
After more than 50 years, however, it is all under threat after Donald Trump accused Ireland of stealing America’s pharmaceutical industry and vowed to “force” US companies, jobs and taxes to return home.
This has concentrated the minds of local politicians, who have called on the European Commission president, Ursula von der Leyen, to visit the area. She met pharmaceutical companies in Brussels on Tuesday to hear that tariffs could “expedite” a shift to the US.
“If Pfizer and the others closed … the collateral damage would be huge,” said John Twomey, something of a local historian and treasurer of the local Gaelic Athletic Association in Shanbally, a tiny village a two-minute drive from Pfizer’s entrance.
“Half the place would be blown to bits, all the workers, the subcontractors, from the guys supplying the toilet rolls, to the farms supplying meat for the canteens.”
EU pharmaceuticals warn of ‘risk of exodus’ as result of Trump’s threats on tariffs
Earlier today I brought you Donald Trump’s comments overnight on “major” tariffs to be announced “very shortly” on pharmaceuticals (9:20).
My colleague Lisa O’Carroll looked at the risks such measures could pose for Europe:
Pharmaceutical companies in the EU have warned of a “risk of exodus” to the US as stocks in the sector slid around the world on the back of Donald Trump’s renewed threat to impose tariffs on US drugs imports.
Drugmakers’ shares across Europe and India, another foreign drugs hub, slipped on Wednesday after Trump indicated further carnage was on the way in addition to the 20% “reciprocal tariffs” on imports that kicked in overnight.
Pharmaceuticals have so far been exempted from the levies, but on Tuesday evening the US president told an event at the National Republican Congressional Committee that he would announce a large tariff on drugs imports “very shortly”.
Trump claimed the tariff would incentivise drug companies to move their operations to the US, but has not said when and by how much he plans to raise the levy.
EU pharma firms have called on the European Commission president, Ursula von der Leyen, to push for “rapid and radical action” to mitigate the “risk of exodus” to the US after a meeting in Brussels.
Read her story in full here:
Estonia signs into law rules banning non-EU citizens from local elections
Estonia’s president has signed into law a constitutional amendment banning non-EU citizens from taking part in local elections, a move targeting the large Russian minority in the Baltic state.
The amendment, the first to the country’s constitution since it was drafted in 1992 and passed by parliament in late March, comes in response to growing concerns about Estonia’s security three years after Russia’s full-scale invasion of Ukraine in 2022, AFP noted.
In a statement on his office’s website, president Alar Karis said that the change had “very serious consequences,” but insisted it was “undoubtedly legitimate.”
But he noted that “it is equally important that the people who lost their right to vote do not feel that the state wants to exclude them from social life, or that it sees each and every one of them as a threat to security.”
He said that the parliament may choose to look into how to “guarantee that people who have lived here for a long time and who are loyal to Estonia will still have an open path to Estonian citizenship, even if other countries have prevented them from freely choosing their citizenship.”
According to Estonian media, the measure will affect approximately 83,000 Russians in Estonia (6% of the country’s 1.4m population), a fraction of the broader 370,000 Russian-speaking minority in the country.
The next local elections are scheduled for October.
German coalition deal reportedly agreed, with press conference this afternoon
Leaders of the German conservative and socialist parties have reportedly agreed on a coalition deal to form the next government, German media are reporting.
The German press agency dpa said that the leaders of the two parties will take part in a joint press conference 3pm German time (2pm UK) to present the result of their talks.
But the deal would still have to be approved by a vote of the SPD’s 357,000 members, whic is expected to take at least ten days, meaning CDU leader Friedrich Merz is unlikely to be formally confirmed as the next German chancellor before May.
Media speculations suggest the CDU/CSU will take the interior and foreign ministries, taking on the critical job of resolving the country’s migration crisis and finding Germany’s place in the world despite global uncertainty surrounding the new US administration.
Early reports suggest that the SPD, which led the outgoing government of Olaf Scholz, will keep the finance and defence portfolios, leaving the popular defence minister Boris Pistorius in the next cabinet.
This development is very timely as the far-right Alternative für Deutschland, has topped a federal voting intention poll for the first time in history (10:31), exploiting the political limbo amid global uncertainty (10:39).
UK to seek improved trade with EU in response to Trump’s tariffs, Russia’s war against Ukraine
UK finance minister Rachel Reeves told the Financial Times newspaper (£) that the UK would seek to improve its trade arrangements with the European Union, partially in response to Donald Trump’s sweeping tariffs.
In an interview with the paper, she said there was “a greater willingness” from countries around the world to look at ways to resolve barriers, and the challenging global environment – from Russia’s invasion of Ukraine to trade disruptions caused by Trump – “mean there is an even greater imperative to improve our trading relationships with Europe.”
Her comments come ahead of next month’s first EU-UK summit in London, widely touted as an opportunity to progress the “reset” in relations between the bloc and its former member state.
Tariffs will hit working, middle classes hardest, Spain’s Sánchez warns
Sam Jones
Speaking during a visit to Vietnam on Tuesday Spain’s prime minister, Pedro Sánchez, said his country supported free trade, adding that tariffs would hit the working and the middle classes hardest.
“We support an international order that’s based on rules, free trade, and economic openness,” he said. “We think trade wars benefit no one and harm everyone … Every country loses and those who lose most of all are the workers and the middle classes of our countries.”
During the visit, the socialist PM and his Vietnamese counterpart, Pham Minh Chinh, signed a joint declaration aiming to boost ties to the level of comprehensive strategic partnership.
Italy halves 2025 growth forecast over tariff fears
The Italian government is preparing to lower its economic growth forecast for this year from 1.2 to 0.6 percent amid concerns about US tariffs, a government source told AFP.
This forecast is included in the economic roadmap for the coming years, which is expected to be approved by prime minister Giorgia Meloni’s cabinet later on Wednesday.
Italy, the eurozone’s third largest economy, is the world’s fourth largest exporter and risks being hard hit by the new tariffs.
AFP noted that around 10 percent of Italy’s exports go to the United States, and last year Rome had a trade surplus with Washington of 38.9 billion euros.
Meloni has criticised US president Donald Trump’s tariffs, including duties of 20 percent on imports from the European Union, and has urged both sides to reach a deal.
The leader of the far-right Brothers of Italy party announced on Tuesday that she would visit Washington on 17 April to talk to Trump directly.
AfD gains in polls as Germany faces dire economic news and political limbo – snap analysis
Deborah Cole
We’ve seen the AfD, which came in second in February’s general election, gaining in the polls in recent weeks as Germany has faced a deluge of dire economic news while in political limbo.
The first-place CDU/CSU of Friedrich Merz, the prospective new chancellor, has been racing to cobble together a coalition deal with the Social Democrats (SPD) and they are believed to be in the final stretch, with a pact likely as soon as this afternoon.
But a sense that the EU’s top economy is adrift while facing the catastrophic impact of the Trump tariffs for a major exporting nation has hurt confidence in the new government even before it has taken office.
Merz has largely kept to his pledge to avoid the spotlight while the negotiations were going on but this left a vacuum often filled by the AfD, whose top leadership has been railing against the mainstream parties as incapable of facing up to Germany’s deep-seated structural problems.
The conservative leader has also faced criticism within his own camp of backing away from the fiscal discipline and hard line on immigration he promised during the campaign in order to win the support of the SPD — leaving more flanks open for AfD attacks.
A poll last week showed that Merz had only 25% support among German voters – about 10 points lower than when he won the election.
Far-right Alternative für Deutschland tops federal poll in Germany for first time
It has been long coming, and here it is – of all days, today.
Just as we wait for the coalition talks between the conservatives from CDU/CSU and the Social Democrats, SPD, to finally conclude 40 days after the last federal election, the far-right Alternative für Deutschland has come top in the latest Ipsos poll on German voting intentions, at 25%, one point ahead of the election winners, CDU/CSU at 24%.
The Social Democrats are third with 15%, with the Greens and the Left both on 11%. The Sahra Wagenknecht Alliance is fifth at 5%, and the liberals from the Free Democratic Party at 4%.
This is the first time the AfD has topped a federal election poll in Germany in history, putting further pressure on the Brandmauer (firewall) arrangement seeking to marginalise the party in German politics.
AfD’s co-leader Alice Weidel immediately reacted to the news, saying in a social media post that:
Citizens want political change – not a “business as usual” coalition between the CDU/CSU and SPD!
Romania ‘has not received any official information’ on US plans to withdraw troops, defence ministry says
If you followed the blog yesterday, you know I focused a lot on growing concerns and speculations about up to 10,000 US troops being potentially withdrawn from central and eastern Europe as part of a broader review of US military presence in Europe.
Romania, which would be one of the countries most affected, just got back to me on the speculations, with the country’s defence ministry insisting it “has not received any official information in this regard from the US.”
It said there are approx. 1,700 US troops in the country at the moment, and stressed it’s committed €2.5bn in the modernisation and expansion of the 57th airbase in Mihail Kogălniceanu, used by the Americans.
“Romania has been one of the first allied countries to raise its defence budget above 2% of GDP, constantly exceeding the commitment to invest a minimum of 20% in modern technology, which demonstrates our firm position to undertake increasingly important security responsibilities,” it added.
Morning opening: Tariffs? Doing very well, thank you.
Jakub Krupa
US president Donald Trump continues to rewrite the rules of global trade, as his sweeping tariffs take effect.
Rates on imports to the United States from dozens of economies rose further from 12.01am (0401 GMT) on Wednesday, with tariffs imposed on Chinese products since Trump returned to the White House reaching a staggering 104%. The new tariffs include rates of 20% on the European Union, 26% on India and 49% on Cambodia.
Overnight, he appeared to show no signs of doubt or remorse, insisting “the tariffs, you’ve been hearing about tariffs – we’re taking in almost $2bn a day in tariffs, … and we’re doing very well.”
Using rather fruity language, he went on to tell his audience:
I think we’re going to do much better and just remember the numbers when you get up to $2bn a day, $2bn a day, they say sir, it can’t be that can it, I said, yeah, it can. It’s the biggest — the biggest transaction ever made.
This is bigger than any deal you guys, some of you work for companies. Your companies are peanuts, I don’t care how big they are compared. This is the largest transaction in the history of our country.
And don’t let some of these politicians go around saying, you know, because I’m telling you these countries are calling us up kissing my ass. They are — they are dying to make a deal.
If that wasn’t enough, Trump also signalled more “major” tariffs to be announced “very shortly”, specifically targeting pharmaceuticals.
The US president made it clear in the past that he had a particular gripe on this with Ireland, so let’s see if it’s a fortunate or unfortunate coincidence that Ireland’s deputy prime minister, foreign and trade minister Simon Harris is meeting with the US secretary of commerce Howard Lutnick today.
This side of the Atlantic, we will see the EU finalise the first part of its response, with retaliatory tariffs against Trump’s original measures on steel and aluminium.
EU member states will vote on the final list on Wednesday, which targets €21bn of goods, down from €26bn originally foreseen, after talks with the EU’s 27 member states and many industry bodies. The list of potential targets facing mostly 25% retaliatory tariffs now ranges from almonds to yachts, via diamonds and dental floss, soya beans and steel parts. But bourbon and wine have been dropped.
It promises to be a yet another turbulent day for Europe, and if you want to keep an eye on the markets, you can also follow our business live blog in parallel here:
Elsewhere, I will be keeping an eye on:
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Closing stages in German coalition talks, expected to be wrapped up today – potentially as early as midday – after late night talks and an early restart this morning;
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Nato secretary general Mark Rutte’s visit to Japan where he is due to speak alongside the country’s prime minister Shigeru Ishiba;
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French president Emmanuel Macron’s talks with embattled Serbian president Aleksander Vučić who continues to face mass protests led by student movements over alleged corruption;
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Ukrainian prime minister Denys Shmyhal’s visit to Brussels for a meeting of the EU-Ukraine Association Council and talks with leading bloc leaders;
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and Italian prime minister Giorgia Meloni welcoming the British royals as they continue their formal visit to Italy.
It’s Wednesday, 9 April 2025, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
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