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Factbox-Elements of German parties' coalition paper
Published by Global Banking and Finance Review
Posted on March 8, 2025
3 min readLast updated: January 25, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on March 8, 2025
3 min readLast updated: January 25, 2026
German parties reveal coalition paper with policies on migration, energy, economy, and labour, aiming for growth and integration.
FRANKFURT (Reuters) - German election winner Friedrich Merz's conservatives and the Social Democrats (SPD) completed preliminary talks on Saturday on forming a coalition government that will take further shape in coming weeks.
Following are elements of an 11-page position paper on various policy areas that the parties have agreed.
MIGRATION
Border controls are to be expanded so that numbers of illegal entries can be significantly reduced, including those of asylum seekers.
Measures to ensure that those required to leave the country do go will be toughened.
There will be more support to integrate new citizens through language programmes, especially for children. The SPD said it wants to see more immigration success stories.
WELFARE
Recipients of social security payments will face a tougher regime and, if able to work, might be struck off the list if they refuse job offers.
The SPD wants to boost house-building and prolong a cap on certain rent levels for two years.
ENERGY
The paper envisages power price cuts by 5 cents per kilowatt hour (kWh). In order to reach that goal, a reduction of the electricity tax towards the minimum European Union level and a halving of power transmission grid fees is suggested.
Germany is to revive a stalled programme to bring about new 20 gigawatts (GW) of new gas-fired power plants. It is also set to work towards nuclear fusion technology and enable carbon sequestration and storage (CCS), the parties said.
ECONOMY/INDUSTRIES
Economic growth of 1-2% will be targeted after two years of recession. Industries deemed as strategic, such as semiconductors, battery production, pharmaceuticals and hydrogen are to be strengthened.
A reform of the corporate tax system will be initiated.
VAT on gastronomy will be lowered to 7% permanently.
As a support for struggling manufacturers of electric cars, the parties wants to subsidise purchasers. There was a pledge to prevent penalties if carmakers exceed CO2 emissions standards.
Overall, the paper promises less bureaucracy and more digitisation.
LABOUR
There will be tax incentives for pension-age workers, who stay on in the workplace, and more support for motorists' trips to work.
A minimum wage of 15 euros per hour from 2026, stable pensions, and tax advantages for overtime are among other targets.
TWO KEY FINANCIAL MEASURES
Attention will now turn to the outgoing parliament, where lawmakers will debate from March 13 a 500-billion-euro ($541.60 billion) infrastructure fund and changes to state borrowing rules known as the "debt brake", especially with view to boosting defence.
The measures, which were presented earlier this week, are key to the effectiveness of the new coalition, and as they require a change of the constitution they are not yet a certainty. There is opposition from right and left-wing parties.
($1 = 0.9232 euros)
(Reporting by Vera Eckert, editing by Angus MacSwan)
The article discusses the key elements of the German coalition paper focusing on various policy areas.
The coalition paper addresses migration, welfare, energy, economy, and labour reforms.
The main parties involved are Friedrich Merz's conservatives and the Social Democrats (SPD).
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