Germany's Merz pledges to turn country into 'growth locomotive'

Germany's new Chancellor Friedrich Merz believes the country's ailing economy, once envied across Europe, can be turned into a "growth locomotive" again, promising tax breaks, infrastructure investments and cuts to red tape.

"We can use our own strength to once again become a growth locomotive admired by the world," said Merz during his first government statement in parliament after taking office last week.

Merz said he was also banking on international trade in the efforts to revive the economy.

"We want to support the EU in concluding as many new trade agreements as possible right now," the chancellor said, adding he wanted to avoid a prolonged trade dispute with the US.

Germany would continue to adhere to national, European and international climate targets, he said, but with the focus shifting to the pricing of carbon dioxide.

Resulting revenue wouldn't be used by the state but returned to the economy and citizens "in a targeted manner," Merz said.