The heads of Germany’s federal states adopted a “modernization agenda” containing more than 200 measures at their high-level meeting with Chancellor Friedrich Merz (CDU) on Thursday. The plan aims to accelerate procedures in areas such as administrative services and construction law. However, a decision in the ongoing financial dispute over relieving municipalities was postponed. A special summit is scheduled for the first quarter of 2026.
“This will be noticeable once everything is implemented, because it will give things a real boost,” said Saxony’s Minister-President Michael Kretschmer (CDU), who currently co-chairs the Conference of Minister-Presidents (MPK). The federal and state governments want to reduce bureaucratic costs by 25 percent. Central to this effort is what officials described as the “approval fiction.” Going forward, fully completed applications submitted to public authorities will be considered approved if they are not processed within a set period.
The agenda also includes smaller adjustments: for example, ID cards for citizens aged 70 and older will become valid indefinitely, eliminating the need for regular renewals. “Pre-filled and automated tax returns” should make filing easier, said Rhineland-Palatinate’s state premier and MPK chairman Alexander Schweitzer (SPD). He said this would be particularly beneficial for retired taxpayers “who are required to file but for whom the actual effort would normally be manageable.”
A shared digital operating system for the federal government, states, and municipalities is being developed. Identification documents, certificates, and official notices will in the future be available “directly and securely on the smartphone.” Public administration will also receive support through artificial intelligence. Infrastructure expansion is also expected to speed up. Roads and bridges are to be approved more quickly, as well as infrastructure for renewable energy, fiber-optic internet, and schools.
On the financial situation of municipalities, Merz announced joint proposals from the federal government, states, and local authorities. He said the goal is to ensure that social benefit laws are “applied in a targeted way” and that expenditure can be kept under control. Municipal deficits are expected to reach around 30 billion euros annually. “The municipalities cannot withstand that,” the chancellor said.
Kretschmer added: “We agree that we want performance fairness in our country, that those with strong shoulders must carry more than those with weaker shoulders, but also that no one can sit back.” Against this backdrop, he said, “we have to address the federal government’s social benefit laws.” The meeting ended without clarity on whether the Bundesrat will drop its resistance to the higher commuter allowance and the reduced VAT for restaurants. These federal measures would result in revenue losses for the states, which are demanding compensation.
They can only take effect in time for the New Year if the Bundesrat approves them on December 19. “It will come,” Kretschmer said Thursday evening. “It has been promised.” Schweitzer noted that Bundesrat issues are not discussed at MPK meetings and that there is no “interlinkage.” He said he could not yet say whether there would be a majority for the proposals in the upper chamber.
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