EU and SPD advocate for extensive reforms, yet construction sites remain substantial
The German coalition committee is currently discussing the Investment Acceleration Act, which aims to utilise the 500 billion euro infrastructure fund in a responsible manner. Experts from the federal government are set to assist in this endeavour.
The reforms are designed to balance various interests and find compromises, but concerns about additional budget holes have arisen. Measures such as an increased commuter allowance and agricultural diesel promotion could potentially widen the budget gap further.
Chancellor Merz has suggested saving five billion euros from the citizen's allowance, while leaders of the CDU, CSU, and SPD are focusing on agreeing on several projects in the areas of economy and social affairs.
The budget for 2027 currently has a 30 billion euro hole, and the citizen's allowance is a point of contention in the ongoing debate between the Union and SPD regarding the costs of the social system. Discussions about possible tax increases to fill the state coffers are also underway, including higher taxes for top earners and wealthy individuals.
SPD leader Lars Klingbeil has emphasised the importance of today's reforms fitting into the current time and not exacerbating existing inequalities. Dennis Radtke, chairman of the Christian Democratic Workers' Association, has advocated for tightening the inheritance tax and slightly increasing the wealth tax.
Klingbeil has also praised the Agenda 2010 of former Chancellor Gerhard SchrΓΆder (SPD). However, no concrete decisions on the reform draft are expected at today's coalition committee meeting; a commission will be established to make proposals for long-term reforms.
The social system, including pensions, health and long-term care insurance, basic income, and other benefits, is becoming increasingly expensive due to economic downturn and demographic changes. Sharpened participation obligations may be a focus of the reform draft in the Ministry of Labour, according to earlier statements by Bas.
Painful decisions may now be necessary, such as regarding subsidies, funding programs, and the social and tax system. SPD parliamentary group leader Matthias Miersch has suggested that those with very high incomes may need to contribute more to alleviate middle incomes.
As the coalition committee moves forward, optimism is growing ahead of the planned "autumn of reforms". Government spokesman Stefan Kornelius stated this ahead of the third meeting of the coalition committee. The name of the commission chair responsible for proposing long-term reforms for the social systems remains unspecified without additional context.
