Germany's SPD Names Lars Klingbeil Finance Minister

Germany’s Social Democratic Party (SPD) has selected Lars Klingbeil as the country’s next finance minister in the incoming centrist coalition government, replacing Joerg Kukies, the party announced Wednesday. Klingbeil, a veteran SPD leader, will also serve as vice chancellor.

"The committee today tasked Lars Klingbeil with taking on the vice-chancellorship and entering the new government as federal finance minister," said SPD General Secretary Matthias Miersch during a press conference.

Klingbeil, 47, will also oversee the selection of the SPD’s ministerial team before the new government is finalized early next week. His appointment follows a vote by SPD members in favor of a coalition agreement with the center-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU).

A Seasoned Politician with a Conservative Lean

Though Klingbeil lacks extensive fiscal experience, he has been one of the SPD’s two co-leaders since 2021 and was elected chief of the party’s parliamentary faction earlier this year. A longtime SPD insider, he previously served as general secretary and worked in constituency offices for prominent figures, including former Chancellor Gerhard Schröder.

Politically, Klingbeil is seen as part of the SPD’s more conservative wing. He has advocated for a higher minimum wage, pension reforms, and infrastructure modernization, while remaining open to tax increases. He has also supported bolstering Germany’s military and criticized U.S. President Donald Trump’s trade policies.

New Government Faces Economic and Geopolitical Challenges

The incoming coalition—led by CDU leader Friedrich Merz, who is set to become chancellor next week—will inherit a stagnating economy, infrastructure deficits, and pressure from European allies to increase defense spending. The government must also navigate trade tensions linked to U.S. tariffs and domestic discontent over economic policies.

Before finalizing the coalition deal, the CDU/CSU and SPD agreed to overhaul Germany’s debt rules and establish a €500 billion infrastructure and climate fund. As finance minister, Klingbeil will play a central role in implementing these measures, marking a significant shift in German fiscal policy. Economists warn that success will depend on execution.

Coalition Secures Narrow Majority

The SPD’s membership approved the coalition agreement with 84.6% support in an online vote, though turnout was just 56%. The party, which suffered its worst postwar election result (16.4%), will control key ministries, including finance, justice, and defense.

The CDU/CSU, which won February’s election with 28.5% of the vote, needed the SPD’s support to avoid relying on the far-right Alternative for Germany (AfD), which finished second. The coalition holds a slim majority with 328 seats in the 630-member Bundestag.

Germany’s parliament will convene on May 6 to formally elect Merz as chancellor, concluding a transition triggered by the collapse of the previous government over budget disputes. The new administration aims to revive growth, tighten migration policies, and modernize the EU’s largest economy.

This will be the fourth time the Union and SPD have governed together, having previously shared power under former Chancellor Angela Merkel.