Europe
German elections pave the way for a potential CDU-SPD grand coalition

After the 23 February German federal elections, all eyes turned to the coalition scenarios and the program of the next chancellor. With the Christian Democrats (CDU/CSU) emerging as the leading party, it is almost certain that CDU leader Friedrich Merz will become the next chancellor and form the government.
At this point, since the CDU has not been able to secure a majority, the question of who will knock on the door for a coalition is on the agenda. Merz and his party, which closed the door to the second-ranked Alternative for Germany (AfD), are likely to mobilize for a “grand coalition” with the SPD.
Looking at the numbers, the fact that the FDP, the junior partner of the previous traffic-light coalition, and the new left-wing party, the Sahra Wagenknecht Alliance (BSW), failed to pass the threshold and are now out of parliament seems to favor the CDU-SPD coalition. With these two parties out of parliament, the possible grand coalition automatically has a majority of seats.
On the other hand, if the BSW, which seems to have fallen short of the threshold by around 2,000 votes, manages to enter parliament after objections, the CDU-SPD coalition will need a third party. The biggest third-party candidate for such a coalition seems to be the Greens.
The SPD’s worst result since the Second World War also weakens the party’s hand in a possible coalition. Although Chancellor Olaf Scholz continues to serve as a caretaker, it seems less likely that he will remain at the head of the party. The most likely candidate to lead the SPD is Defense Minister Boris Pistorius.
Pistorius’ personal popularity, supported by the media, seems to even surpass Merz: Public broadcaster ARD asked voters which candidate they would most like to see become chancellor. Among those nominated by the parties, Friedrich Merz came first with 34%, but the person with the strongest voter support (though not one of the main candidates) was Boris Pistorius with 47%.
Party co-chairman Lars Klingbeil will head the SPD’s parliamentary group. So far, Klingbeil has been tight-lipped about whether the party would accept an alliance with the CDU.
In any case, there are other, bigger problems beyond the numbers. Some disputes between the CDU and the SPD, and between the CDU and the Greens, could come to the fore in a possible coalition. These include the war in Ukraine, transatlantic relations, the issue of migration and defense spending, and the debate on the constitutional debt brake.
On the issue of migration, for example, the CDU and its leader Merz have shown that they will not hesitate to side with the AfD. According to the exit polls of public broadcaster ZDF, voters made it clear that their biggest concerns were immigration and security (44%), followed by the state of the economy (35%).
The debate on defense spending and the constitutional debt brake could be Merz’s soft underbelly, since the CDU, which is also fiscally “conservative,” has long opposed any change or relaxation of the debt brake clause, which limits state debt to 0.35% of GDP. Merz had signaled before the elections that this position could be relaxed.
The two parties that will play a critical role in the new parliament, Die Linke (Left Party) and AfD, will also be decisive. The Left Party is in favor of lifting the debt brake but also wants to reduce the defense budget and opposes Merz’s platform on many other issues, including taxation and immigration. This could make any deal involving this party extremely difficult.
The AfD, on the other hand, wants to stick to the country’s strict debt limits but is in favor of increasing defense spending. And given the party’s warm relations with the new US government across the Atlantic, it is unlikely that Alice Weidel and her colleagues will oppose Trump’s demand for more European defense spending.
The failure of the “mainstream” parties to secure a two-thirds majority in parliament will also make it more difficult to pass the debt-ceiling reform. According to Bloomberg , this could lead to “some creative alternatives.”
The new chancellor could ask parliament to temporarily suspend the constitutional rule and allow higher spending. The most important risk to watch in such a scenario would be any litigation at the country’s Federal Constitutional Court. While it is difficult to predict how the court will react, it may be more inclined to an immediate suspension, especially given the current geopolitical challenges.
In addition, Markus Söder, leader of the CSU, the CDU’s sister party in Bavaria, had declared before the elections that he was also cold to an alliance with the SPD. One can imagine what the CSU, which does not even accept the SPD, would say about a federal coalition with the Greens.
However, the Greens seem to have left the door open for a coalition. When asked whether the Greens would contact the CDU for a possible coalition, Vice Chancellor Robert Habeck said that it was Merz’s prerogative to initiate such talks, but he also made it clear that the Greens were willing to participate in a coalition.
“This is the only possibility,” Habeck told public broadcaster ZDF. “What this result means has to be understood: We are in a very difficult situation,” Habeck said.
German business executives have already begun to assess the election results in terms of “stability” and “competitiveness.” Christian Bruch, CEO of Siemens Energy, said in an emailed statement: “It is important that the democratic center parties form a stable government as soon as possible to address these challenges as soon as possible. Germany must quickly regain its competitiveness. Steps in energy policy are vital for this,” he said.
Bruch’s comments are in line with a statement made last night by Deutsche Bank CEO Christian Sewing, speaking in his capacity as head of Germany’s banking lobby. “Germany now needs a government that is willing to act and can do so quickly. The challenges facing our country are enormous: the economy urgently needs a fresh start with fundamental reforms,” Sewing said.
Europe
Ramstein format delivers massive military packages to Ukraine

The 28th meeting of the Ukraine Defense Contact Group, held in the Ramstein format, concluded with unprecedented military support for Ukraine from its allies.
According to a statement from the Ukrainian Ministry of Defense, the security assistance to be provided this year is expected to exceed the figures from all previous years of the full-scale war.
Ukrainian Defense Minister Rustem Umerov stated after the meeting, “The 28th meeting of the Ukraine Defense Contact Group in the Ramstein format was another confirmation that partners remain reliable and determined in supporting Ukraine.”
Umerov emphasized that Ukraine achieved significant results, adding, “According to the outcomes of the meeting, our partners announced new aid packages and significant support measures.”
Record drone aid from Britain
Britain announced a record £350 million in aid for drone procurement. According to Minister Umerov, this will enable the delivery of 100,000 drones to Ukraine in 2025.
Overall, Britain’s military support in 2025 will amount to £4.5 billion, with £247 million of this sum allocated for the training of the Ukrainian Armed Forces.
Germany’s massive €5 billion package
Germany approved a new military aid package totaling €5 billion.
Umerov shared the information, stating, “The Federal Parliament (Bundestag) has already approved this decision.” The package will specifically include funding for long-range weapons to be produced in Ukraine, as well as the delivery of air defense systems, weapons, and ammunition.
Netherlands’ contribution to naval power
The Netherlands is providing an aid package worth €400 million. This package includes a mine countermeasures vessel, boats, and naval drones.
Belgium’s long-term commitment
Belgium announced a long-term initiative. Within this framework, €1 billion in annual aid will be provided to Ukraine until 2029, and a mine countermeasures vessel will be delivered.
Norway allocated $700 million for drones, focusing on Ukraine’s defense industry, and $50 million to the NSATU Trust Fund.
Canada allocated $45 million for drones, electronic warfare systems, IT solutions, and Coyote and Bison armored vehicles.
Sweden will contribute €440 million to international programs for the procurement of artillery ammunition, drones, and other weapons for Ukraine.
Europe
‘Force with force’: DGAP calls for aggressive EU strategy in US trade dispute

Officials from the German Council on Foreign Relations (DGAP) state in their public announcements that the EU should respond to the US government “force with force” to stop it.
Brussels’ measures against the Trump administration’s tariffs have so far been extremely timid. In April, the EU prepared a list of US goods threatened with retaliatory tariffs in response to US steel and aluminum tariffs; this list includes goods such as soybeans and Harley Davidson motorcycles, valued at 21 billion euros.
Additionally, it prepared another list of US goods worth 95 billion euros, planned to be finalized next week; this list includes cars and auto parts, aircraft, medical devices, and chemicals.
‘The only way to fight Trump is to risk instability’
The EU’s cautious approach is causing growing dissatisfaction among economic experts and political advisors. For example, DGAP expert Markus Jaeger argues in his new article that the EU should adopt a more aggressive policy.
Jaeger states that attacking US states where Trump has a broad voter base with tariffs is pointless, as these measures “rebound without hitting Trump.” Instead, he suggests that directly addressing “the president’s cost-benefit calculations” would be a better approach.
The German expert points out that past experiences have shown Trump avoids a “comprehensive financial instability risk” and withdraws tariffs when such a risk emerges. He recalls, for instance, that a significant stock market decline prompted Trump to freeze the tariff war against China.
Therefore, Jaeger calls for the EU to switch to a strategy involving a “credible and effective retaliatory threat,” stressing that, if necessary, an escalation of the conflict against “hostile protectionist measures” should not be avoided.
According to Jaeger, a former employee of Deutsche Bank Research, “risking comprehensive instability” if necessary is the only tactical way to defend against Trump.
‘China did what the EU couldn’t do against the US’
A more fundamental critique came from another DGAP expert, Shahin Vallée.
Vallée previously served as an economic advisor to EU Council President Herman Van Rompuy, then-Economy Minister Emmanuel Macron, and finally George Soros.
Vallée argues that the EU’s efforts to understand and deal with US President Donald Trump after his re-election have been a “complete failure.”
The DGAP expert argues that the EU failed to recognize the need to respond to Trump “force with force,” “openly and visibly.” He believes Brussels missed the “extraordinary opportunity” that arose when Trump was “colliding head-on with the entire world simultaneously.”
According to Vallée, it would have been possible to make Trump yield if action had been taken to isolate the US by immediately forming alliances with countries like China or Canada.
Vallée asserts that China achieved this success by “resisting and leveraging its power in critical areas,” compelling the US to “completely surrender.” He further claims China managed this without needing EU cooperation in a future economic war with the US.
According to the expert, the EU is currently stuck in the next round of tariff threats and will face even stronger pressure in the future.
‘Respond to force with force’
In this context, Vallée insistently calls for the EU to make a “complete U-turn” in its economic policy towards the Trump administration.
According to the author, as a first step, Brussels should immediately implement retaliatory tariffs against US steel and aluminum tariffs. Simultaneously, it should announce new counter-tariffs against automotive tariffs and suspended “reciprocal” tariffs; this should cover imports from the US exceeding 150 billion euros.
Secondly, the EU should restrict exports of goods that the US cannot substitute. Vallée gives the example of lithography technology used in semiconductor manufacturing, likely referring to equipment produced by the Dutch company ASML, which is used in manufacturing the most advanced chips and currently has largely no alternative, at least in the West.
Thirdly, the DGAP expert advocates for measures against US service sector imports. These measures include imposing digital taxes on the profits of large US internet companies on one hand, and restricting the activities of US financial service providers benefiting from European assets on the other.
Vallée advises being prepared for a “sharp escalation” of the conflict in this regard.
Europe
Vatican under Pope Leo XIV warns against AI ‘playing God,’ urges ethical development

The new leader of the Catholic world, Pope Leo XIV, has made reducing the risks of “uncontrolled artificial intelligence” the defining mission of his papacy.
In his first official address to the cardinals, the new Pope warned against the dangers artificial intelligence poses to “human dignity, justice, and labor.” Two days later, speaking to journalists, he praised the technology’s “immense potential” while also emphasizing the responsibility to “ensure it is used for the benefit of all people.”
Like Pope Leo XIII, whose name he took and who called for “restructuring” relations between workers and capital during the industrial revolution in the last quarter of the 19th century, Leo XIV positions himself as a “guardian of the social fabric” against uncontrolled modern technologies.
Indeed, the new Pope had said he took this name pointing to the role of his predecessor, who published the famous papal encyclical Rerum Novarum, in “social matters.”
Franciscan friar Paolo Benanti, a Vatican advisor on artificial intelligence ethics, told POLITICO, “The Church asks us to look to the heavens, but also to walk on earth as the times require,” adding that it is not unusual for the church to offer expertise in such a futuristic field.
Maria Savona, an AI expert and professor of innovation economics at Luiss University in Rome and the University of Sussex, stated, “The Vatican wants to avoid certain AI developments that could harm human rights and dignity and disproportionately affect low-skilled workers.”
The Vatican’s efforts to secure a place for itself in artificial intelligence regulation began with Leo’s predecessor. In 2020, Pope Francis brought together technology companies like IBM and Cisco, as well as religious and political leaders, to sign the Rome Call for AI Ethics, a commitment to developing artificial intelligence technologies that are “accountable and benefit society.”
In January, the Vatican issued an official statement warning that artificial intelligence could lead humanity to become a “slave to its own work.”
Leo, the first pope from the US—the homeland of Silicon Valley and the tech revolution—and a mathematics graduate, is in a “unique position” to carry this banner, according to POLITICO.
Meanwhile, Washington is spearheading a deregulation move in the AI field. President Donald Trump rolled back the security rules set by his predecessor, Joe Biden, and announced a half-trillion-dollar AI plan with leading company OpenAI.
According to Benanti, the church’s role as an “expert in humanity” can encourage leaders, especially in Catholic countries, to “create AI that values people and aligns with social justice.”
In Leo’s first meeting with Italian leader Giorgia Meloni, the two pledged to continue working for “ethical and human-centered artificial intelligence development.” Last year, at Meloni’s invitation, Francis had addressed G7 leaders on artificial intelligence ethics.
Savona commented, “The Vatican’s interest in artificial intelligence is not strange. Francis also showed great interest in climate change, one of today’s significant problems. The Church’s mission is to adapt to the world while remaining true to its fundamental principles.”
Savona argued that as power concentrates in the hands of tech giants and wealthy nations, the Vatican could use its network in the “Global South” to ensure “more democratic access” to artificial intelligence and push for European-dominated regulations to be adapted to global standards.
On the other hand, Leo himself has fallen victim to AI-generated content. In the first week of his papacy, a YouTube video was published allegedly showing Leo praising Burkina Faso’s President Ibrahim Traoré for contrasting the Vatican’s wealth with poverty in Africa.
The Vatican stated that the video was a “deepfake” and part of a recent wave of AI-generated content on African platforms glorifying Traoré as an example of pan-African leadership.
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