By Riham Alkousaa

BERLIN (Reuters) - Germany's conservative Christian Democratic Union (CDU) and its Bavarian CSU sister party won the election on Sunday and are likely to lead the next coalition government.

Below is a summary of their key policy positions, according to their election campaign programme:

ECONOMY

The CDU wants to cut red tape, encourage investments and reduce energy prices to boost the economy.

It wants to lower electricity taxes and grid fees, expand renewable energy, power storage and nuclear power research. It would abolish Germany's supply chain due diligence law.

The party promises to support industry through digitalisation, sovereign AI, and cloud applications. A Digital Ministry would be established along with a "Startup Protection Zone" to shield new companies from red tape.  

FINANCE

The CDU wants to cut corporate tax to a maximum of 25% from an average of 29.9%. It wants to maintain a tax benefit for married couples and give more tax benefits for children. 

Other parties have criticised the CDU, arguing that the party does not spell out how all the promised tax cuts would be financed.

The CDU has pledged to retain Germany's debt brake, a constitutional mechanism that caps the federal government's deficit to a mere 0.35% of output and that has been criticised for stymieing investment. But party leader Friedrich Merz has left the door open to reform the debt brake without spelling out how.

MIGRATION AND BORDER CONTROL

The CDU advocates stricter border controls, faster asylum processing, and deportation for those without legal residency. It calls for a reform of the European asylum law, proposing that applications should be processed in safe third countries rather than within the EU. 

The party seeks to limit social benefits for those required to leave, expand the list of safe countries of origin, and suspend policies such as permitting families of refugees with a subsidiary protection status to move to Germany. 

It also aims to reverse the current government's fast-track naturalization policy and restrict people from holding dual citizenship. 

At the same time, the CDU plans to simplify the recognition of foreign professional qualifications and create a digital "Work-and-Stay Agency" to streamline recruitment, visas and residence permits for skilled foreign workers.

SECURITY

The CDU advocates for stronger law enforcement measures, including harsher punishments, expedited legal proceedings, and increased surveillance at high-risk locations. 

It proposes closing mosques that preach hate and anti-Semitism and promises stronger action against right-wing and left-wing extremist groups.

FOREIGN POLICY

The CDU is committed to complying with the NATO quota of 2% of gross domestic product on defence spending as a minimum. It wants to reintroduce mandatory military service and lead an initiative for a European missile defence system.

The party has been against common European borrowing for defence, although Merz earlier this month said he would be open to discuss options on how to finance an increase on defence spending.

It advocates stronger transatlantic ties with the U.S. and renewed cooperation with France and Poland. It backs Ukraine with diplomatic, financial, humanitarian, and military aid. It supports Israel and backs a two-state solution. 

The party calls for reducing reliance on China. 

CLIMATE

Under the "Yes to Cars" policy, the CDU opposes measures such as inner-city driving bans, parking space reductions, and a general highway speed limit.

It advocates lifting the EU's planned combustion engine ban, reviewing fleet emission limits, and preventing penalties for carmakers failing to meet emissions targets while also expanding electric vehicle charging infrastructure.

The party seeks to abolish the law phasing out oil and gas domestic heating but supports tax incentives for energy-efficient housing renovations. It also proposes reinstating agricultural diesel subsidies and promote emissions trading. 

SOCIAL POLICIES

The CDU plans to boost housing supply by simplifying building regulations, expanding construction zones and promoting social housing investments.

It wants to introduce mandatory preschool language tests for German proficiency and promises to improve student financial aid and to gradually increase child benefits and tax allowances.

It proposes expanding childcare access, increasing tax deductions for childcare expenses, and reversing a law passed last year that cuts regulations for gender transitions. 

(Reporting by Riham Alkousaa and Maria Martinez; editing by Matthias Williams, Alexandra Hudson and Bernadette Baum)