Germany sets swift economic agenda: "Things are moving fast"

Three weeks after taking office, the federal coalition government has agreed on priorities for the coming weeks and months. At the first meeting of the coalition committee on Wednesday, the CDU, CSU, and SPD agreed on an "immediate program" that focuses particularly on rapidly strengthening the economy. The coalition partners also intend to tackle a "major pension reform."

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Chancellor Friedrich Merz (CDU) said after the coalition committee that the planned depreciation options for companies, in particular, should be implemented "very quickly." They should take effect as early as this year and then be available in 2026 and 2027. Reducing bureaucracy and simplifying approval procedures are also priorities. This will "create planning security for the German economy," Merz emphasized. "The most important thing for us is to overcome this structural growth weakness in our country."

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After their two-and-a-half-hour meeting at the Chancellery, the coalition partners published a four-page paper with more than 60 measures considered "priority." "By the middle of the year, it should be clear to everyone that Germany is making progress," the document states.

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At least some of the measures should be adopted by the Bundesrat, if possible, before the summer recess in July, Merz said. "Things are happening fast now." However, the Chancellor admitted that a number of issues will likely continue to occupy the coalition beyond 2025. He spoke of an "extremely positive atmosphere" at the meeting of the coalition partners CDU, CSU, and SPD.

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The coalition has "launched a very ambitious emergency program," said Vice Chancellor and Finance Minister Lars Klingbeil. It is important "that we really pick up the pace now." The people of Germany must see that things are changing. "We want to be a coalition of enablers." However, only a few points in the "immediate action program" have concrete dates for their entry into force.

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January 1, 2026, is mentioned for the reduction of VAT for the catering industry, the increase in the commuter allowance, and the reintroduction of the full agricultural diesel refund for farmers. According to CSU leader Markus Söder, the Christian Democratic Union (CDU)-Left Party (SPD) federal government also intends to pursue a "major pension package." This should include a guaranteed pension of 48 percent of average income, a mother's pension, and an active pension, as well as the so-called early-start pension, he said. Söder also praised the atmosphere of discussions within the coalition. "Speed, speed, speed" is now the common motto. The first meeting of the coalition committee was a "strong start."

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According to Merz, the establishment laws for the planned special funds should be introduced "very quickly." This concerns the federal government's special fund for investments in infrastructure and climate protection, amounting to €500 billion, and the associated special fund for the states, amounting to €100 billion. The coalition partners also agreed to establish a commission to advise on a possible electoral reform. The reversal of the electoral law, which was first applied in the federal election in February, was a particularly important concern for the CDU/CSU.

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On Wednesday morning, the Federal Cabinet already initiated the extension of the rent control and legislative proposals to tighten migration policy. These include a two-year suspension of family reunification for refugees without asylum status and the revocation of the fast-track naturalization program after just three years.