Chancellor Friedrich Merz announced at the Deutsche Börse New Year's reception in Eschborn that the EU free trade agreement with Mercosur states will enter provisional force before the completion of an EuGH review. He views it as a path to greater European independence in an uncertain world order. The agreement was signed at the start of the year after more than 25 years of negotiations.
On February 2, 2026, Chancellor Friedrich Merz (CDU) addressed global upheavals at the Deutsche Börse New Year's reception in Eschborn near Frankfurt. 'We are currently experiencing probably the greatest phase of political uncertainties and risks, at any rate a deep caesura. It is an epochal break,' he said. In a world where great powers pursue power politics that disregard rules, Merz called for greater European independence. 'If we Europeans act jointly and decisively, then we can achieve something in the world,' he emphasized. He envisioned a 'sovereign, free, peaceful, and economically prosperous Europe' in which Germany plays a central role. Merz advocated for more competitive conditions in the EU economy, a common capital market, and investments in areas like artificial intelligence, quantum technology, and biotechnology. He pointed to positive signals: Company formations rose by a third in 2025, and for the first time in a long while, net investments are flowing into Germany in 2026. Regarding the EU-Mercosur agreement with Brazil, Argentina, Uruguay, and Paraguay, Merz was optimistic. The deal, which aims to create a free trade zone with over 700 million inhabitants, was signed in Paraguay at the start of the year. 'According to today's assessment, the attempts to delay it at the last minute, namely in the European Parliament, have not succeeded,' Merz said. 'There will be a provisional entry into force of this trade agreement the moment the first South American state ratifies it.' The European Parliament had decided by a narrow majority to have the EuGH examine its compatibility with EU law. European farmers criticize the agreement, fearing an existential threat from competition in Mercosur states. Supporters highlight opportunities for the automotive industry, mechanical engineering, and the pharmaceutical sector. Merz cautioned: 'Transatlantic relations have changed. But nostalgia or memories of old times will not help us.'
