Market Data 
By Sarah Marsh
BERLIN (Reuters) – Friedrich Merz, the head of Germany’s Christian Democrats, and Markus Soeder, the head of their Bavarian sister party, said on Tuesday they had agreed Merz would become chancellor candidate for their conservative alliance.
Their conservatives are on track to win next year’s federal election.
Here are some of Merz’s key policy positions:
ECONOMIC POLICY
In his 2008 book “Dare more capitalism”, Merz warned against the danger of excessive state regulation and advocated in favour of a more free market economy. He still argues for less regulation, less bureaucracy and lower taxes to boost growth while ensuring the conditions – such as low energy prices – are in place for Germany to remain competitive.
He has attacked the government in particular over its attempts to orchestrate a transition to a carbon neutral economy by favouring certain sectors and technologies such as e-vehicles.
“The framework conditions for the entire economy of our country must be improved – not just for individual sectors or even individual companies,” he said in a recent “MerzMail”, blaming the crisis at Volkswagen (ETR:) on its focus on e-mobility.
Merz has advocated for simplifying the tax system and reducing taxes, particularly for businesses, which he has estimated would cost the state some 20-30 billion euros ($33 billion) in revenue but contribute to greater growth.
He has also has proposed a cut to electricity tax so businesses in Germany can remain competitive, and grid fees.
Merz accused the government of being wrong-footed by UniCredit’s swoop for shares in Commerzbank (ETR:), which is still partly state-owned. Merz suggested the government had sold a portion of its shares too cheaply.
UKRAINE
Merz has taken a more hawkish approach on support for Ukraine than the government, supporting the supply of heavy weaponry to the country long before Berlin.
He backs the delivery of Taurus cruise missiles and fighter jets to Ukraine – a move the government and the public oppose. He has stated “Ukraine must win this war”.
THE UNITED STATES
For 10 years he headed the Atlantic Bridge association, which promotes German-U.S. relations.
With regards to the U.S. presidential election, he has in the past expressed harsh criticism of Republican presidential nominee, former President Donald Trump.
After the U.S. Capitol attack on January 6, 2021 he said Trump was “clearly no democrat”.
EU
Merz, who was a European lawmaker from 1989-1994, has described himself as a “convinced European”. Even in opposition, he met with French President Emmanuel Macron in Paris late last year.
He seems to be positioning himself more closely to Macron in his assessment of the threat posed by Russia than Scholz, according to political risk consultancy Eurasia.
Still, their common defence ambitions may be thwarted by Merz’s objection to common EU debt and fiscal union.
Earlier this month he rejected suggestions by the former European Central Bank chief Mario Draghi that the EU take on more common debt to fund much-needed investments.
He said on Sept. 11 he would “do everything (he could) to prevent this European Union from spiralling into debt.”
CHINA
Merz has struck a more hawkish stance on China than Scholz lately, criticising the chancellor’s decision to approve a Chinese state company taking a stake in the port of Hamburg and advocating to coordinate more with key allies on China.
ISRAEL
He is a staunch supporter of Israel and criticised the decision of the International Criminal Court to issue an arrest warrant for Israeli Prime Minister Benjamin Netanyahu. He also called for naturalisation in Germany to be conditional on the recognition of Israel’s right to exist.
CARS
In 2023 Merz opposed the proposed EU ban on combustion vehicles by 2035, stating that the green transition must be achieved with technology not bans.
Eurointelligence think tank said it expected Merz, if he becomes chancellor, to “waste his entire political capital on the extension of the 2035 deadline for a mandatory end of the production of fuel-driven cars”.
IMMIGRATION AND INTEGRATION
He has called for asylum seekers to be rejected at Germany’s land borders given they arrived there via other EU states and criticised generous welfare benefits for refugees, accusing Ukrainians of “welfare tourism”.
He says Germany’s migration policy should be adapted to both the necessities of the economy, in view of skilled labour shortages, and migrants’ ability to integrate. Immigrants must conform to the Leitkultur, or “German leading culture”, a term Merz has popularised.
SOCIAL POLICY
He has criticised the more generous unemployment and welfare benefits the government introduced last year as disincentivising work and vowed to abolish them if he becomes chancellor.
GENDER
He has criticised the use of gender-sensitive language to make it more inclusive and generally holds conservative views on gender issues. In 1997, Merz joined a minority of his fellow conservative legislators in opposing a law criminalising rape within marriage. He later said this was because he considered it was already a crime under existing assault laws.
($1 = 0.8977 euros)
