Until last Sunday, the CDU/CSU, which emerged as the leading party from the early federal elections, and the SPD, which came in third, negotiated the coalition agreement in 16 working groups.

Despite the intended confidentiality, many of the final documents were leaked to the media. Numerous proposed changes within the documents indicate that the parties are still far from reaching an agreement on many points.

The policy agendas under negotiation include migration; heating, energy, and climate; compulsory military service and military equipment; transportation, construction, and housing; citizen’s income; and finance.

Migration

Migration is one of the most hotly debated topics. Although CDU leader Friedrich Merz has announced a transformation in migration policy, the SPD is unwilling to follow suit on all points.

There is agreement that police at Germany’s permanently controlled borders should be able to turn back asylum seekers “in coordination” with neighboring countries, but what this precisely entails remains unclear.

Furthermore, Algeria, India, Morocco, and Tunisia will be quickly categorized as safe countries of origin, making it harder to obtain asylum. Immigrants who commit serious crimes will be deported.

Another clear decision is that no new admission programs will be opened for foreigners in vulnerable situations. Existing ones, such as for Afghans, will be terminated “as much as possible.” Individuals with subsidiary protection status will also not be allowed to bring their families from their home countries, though this affects only about a third of temporarily recognized refugees.

According to the final report of the migration working group, deportations to Afghanistan and Syria are planned, “starting with criminals and individuals at risk,” even though the new rulers in Syria are persecuting minorities.

Several minor measures have been agreed upon to deport more people more quickly. For instance, legal counseling before deportation will be abolished; previously, those legally rejected could still be legally represented.

In the future, the Federal Police will also be able to request detention to prevent those required to leave the country from absconding. Previously, only immigration authorities could do this.

Heating, energy, and climate

Although the CDU/CSU wants to view the new government’s energy policy as a “new beginning,” many points already agreed upon seem like a continuation of initiatives started by the traffic light coalition government that collapsed last year.

The likely CDU-SPD government does not intend to change the cornerstones of climate and energy policy: the commitment to climate neutrality by 2045, the coal phase-out by 2038, emissions trading, the expansion of renewable energy sources, and the use of hydrogen.

The construction of numerous new gas-fired power plants planned by the coalition government will also proceed. However, the early phase-out of coal power generation by 2030, once desired by the Greens, will be canceled.

The ‘Black-Red’ government now wants to permanently reduce the price of electricity by at least five cents per kilowatt-hour by lowering the electricity tax and grid fees. Energy-intensive industrial companies will also receive relief through an industrial electricity price, but this will cost the state billions.

How the expansion of electricity grids will proceed is unclear. The CDU/CSU wants to prioritize the construction of high-voltage overhead lines, which are cheaper but more exposed than underground cables. The SPD prefers underground cables to prevent protests.

The CDU/CSU wants to “exploit the potential for conventional gas production in Germany” and hopes for a breakthrough with new-generation nuclear power plants.

It also demands a quick review of whether recently decommissioned nuclear power plants can be reactivated, although experts have serious doubts about this. The SPD opposes all of these points.

Leaders also seem poised for difficult discussions regarding the long-debated heating law. The CDU/CSU wants the law repealed as announced but wishes to continue the “heating subsidy.” The Social Democrats only want to amend the law and make the subsidy socially graduated.

There is apparent agreement on climate money, but this too will likely remain theoretical. They state they want to return the revenue from the CO₂ price to citizens, but conditional on introducing “non-bureaucratic and socially graduated relief and subsidies for housing and mobility.” Despite billions in new debt, there is no money for a lump-sum payout.

Compulsory military service and the Bundeswehr

Discussions about the future of the German Armed Forces (Bundeswehr) are also ongoing. The working paper of the Foreign Relations and Defense Working Group shows consensus that the Bundeswehr must become stronger “short-term, decisive, and sustainable.”

Investments could be rapidly initiated through a “Bundeswehr Infrastructure Acceleration Act,” but this law has been in effect since 2022, and bureaucracy remains the biggest obstacle to the swift procurement of weapons and equipment.

The CDU/CSU therefore wants to remove some powers from the Koblenz Procurement Office and appoint an agency for this purpose. They also aim for a “multi-year investment plan,” because a single legislative period is considered too short for arms development and procurement.

The CDU/CSU also wants to reactivate compulsory military service. The SPD opposes this, favoring voluntary service for all and a “broad societal debate” on its introduction.

Transportation, construction, and housing

Regarding transportation, there is only one point of disagreement between the SPD and CDU/CSU: the speed limit on highways. The SPD wants a limit of 130 kilometers per hour, while the CDU/CSU rejects any limit.

On the other hand, there is clarity on the future of the Deutschlandticket (the subscription ticket for buses and trains) beyond 2025. There was initial resistance within the CDU/CSU, but an agreement has now been reached to continue the subscription. However, the price will increase “gradually and with social responsibility” starting in 2027.

The new coalition partners plan to fully utilize the special infrastructure fund for their plans to renovate the railway network: the SPD succeeded in increasing investments and establishing an infrastructure fund with a binding, long-term financing commitment for the railways.

Money from the special fund will also flow into the current renovation concept for busy high-speed train lines, thereby freeing up budget funds for neglected secondary lines.

At the same time, the future government partners are opening up a new financing gap of 5 billion euros for the railway. Until now, the road network had cross-financed the rail network with the help of revenue from truck tolls. In the future, however, financing cycles within a transport sector will remain closed, and truck tolls will flow to Autobahn GmbH.

From a climate policy perspective, air transport seems to be regressing. The likely new federal government wants to reverse the increase in the air traffic tax and continue supporting regional airports, which are often unprofitable.

However, there is at least some relief for local public transport: the SPD managed to ensure that federal regionalization funds primarily flow into local transport.

The SPD also achieved a victory in housing. The rent freeze, unpopular with the CDU/CSU, will be extended for another two years.

Citizen’s Income implementation

It has been agreed that the Citizen’s Income (Bürgergeld), introduced by the coalition government, will be renamed the “new basic income.”

Job centers will receive more money for administration. Conditions will be tightened. Accordingly, every unemployed person must “actively strive to find work.”

Sanctions will be applied “faster, simpler, and less bureaucratic.” Benefits for those who persistently refuse work will be completely cut, in line with the Karlsruhe jurisprudence.

The citizen’s allowance, which Ukrainians also receive and which the state sometimes grants without sanctions, had previously sparked heated debates about fairness.

Public finance

Negotiators have barely agreed on financial details. The CDU/CSU and SPD were able to gain some breathing room in the federal budget by relaxing the debt brake for defense spending. However, the additional fiscal leeway is limited, and the list of expensive election promises both parties want to implement is long.

Ultimately, the Federal Constitutional Court declared the solidarity surcharge (additional tax) legal on Wednesday. This means the federal government will retain annual revenues of 13 billion euros.

The main point of contention is what is possible regarding taxes. For example, it is argued that there isn’t enough money for broad income tax cuts. The SPD wants to increase the tax burden on high earners. This could increase federal revenues, but it is doubtful whether the CDU/CSU will agree to tax increases.

The CDU/CSU particularly wants to reduce the corporate tax from the current 30% to 25%. However, the SPD is only prepared to do this from 2029 and only wants to reduce it by one percentage point.

There is agreement on making investments in Germany more attractive. Depreciation rules are planned to be improved so that investment costs can be deducted from taxes.

The debate over a potential withdrawal from the US F-35 fighter jet program is heating up in Germany and other European countries.

The background to this is that the jet can only be used with the approval of the US government, and restrictive provisions, for example regarding spare parts and software, make it impossible to escape dependence on the US in military operations with the F-35.

In Berlin, former “transatlanticists” in particular are pushing for withdrawal from the F-35 procurement program to achieve military independence.

Last week, a copy of the purchase agreement for the 35 F-35 fighter jets that Berlin decided to procure in March 2022 was leaked to the German magazine Stern. Details of the framework conditions for the purchase, which will cost €8.3 billion, thus emerged.

This purchase is being handled as part of the Foreign Military Sales (FMS) process, which is subject to strict rules. The F-35 purchase agreement grants Washington the authority to “terminate or suspend performance in whole or in part” without further notice “if required by the national interests of the US.” This means the US can unilaterally change the delivery time and quantity at any time. Contractual penalties are generally not provided for in the FMS procedure; legal recourse is excluded.

Once an F-35 fighter jet is delivered, no further modifications are permitted; spare parts and regularly required software updates are only available from the US manufacturer Lockheed Martin. According to the wording in the purchase agreement, “The customer is not authorized to carry out repair and maintenance work beyond the unit maintenance level.” This already guarantees that the German Air Force’s F-35s will only fly when the US administration wants them to.

Furthermore, the F-35’s basic software is kept secret. Therefore, it is impossible to check whether the jet can be influenced externally, but many assume this is possible. Data generated during operation, and especially during any mission, is collected and subsequently stored on Amazon Web Services, making it easily accessible to US authorities.

Finally, the US Foreign Assistance Act allows the US to “monitor the end-use” of the F-35 “at any time.” A “well-informed” source told the magazine Stern, claiming, “Targets, routes, indirectly tactics… US technicians are always on the plane.” An insider with “intelligence service knowledge” also explicitly confirmed this to the magazine, stating that “all mission planning is monitored in the US.”

Since last week, calls have been growing louder in Europe to avoid procuring F-35 jets if possible, or to withdraw from the agreement if a contract has already been signed. This was triggered on the one hand by the Trump administration’s decision to prohibit Ukraine from using US satellite data, and on the other hand by Washington’s continued efforts to acquire the autonomous Danish territory of Greenland.

For example, Danish conservative MP Rasmus Jarlov stated on X that he now regrets supporting Denmark’s decision to purchase 27 F-35 jets for its air force. Jarlov said, “I can imagine a situation where the US demands Greenland from Denmark and threatens to disable our weapons.” Jarlov argued that Copenhagen would then no longer be in a position to defend itself, making the purchase of US weapons “a security risk we cannot take.” He contended that Denmark will invest heavily in armaments in the coming years and should avoid American weapons wherever possible.

Some NATO countries are now considering abandoning the F-35. For example, Canada plans to withdraw from the F-35 purchase, but has already paid for 16 fighter jets due to be delivered early next year. According to Defense Minister Nuno Melo, Portugal, which previously planned to buy the US fighter jet, is also changing its mind. The French company Dassault Aviation has now offered to supply Rafale jets to the Portuguese government.

The Rafale is a fourth-generation fighter jet, unlike the fifth-generation F-35, but it is cheaper and requires no US components, thus offering independence from the US. French President Emmanuel Macron argued on March 16 that European countries should, in principle, switch from the F-35 to the Rafale; furthermore, the new Franco-Italian SAMP/T air defense system could be used instead of the US Patriot air defense system.

One challenge stems from the fact that a number of European NATO countries, such as the United Kingdom, Norway, the Netherlands, Belgium, and Italy, already possess F-35 jets. Many other countries, including officially neutral Switzerland, have placed binding orders for the aircraft.

Conflicting voices are also rising in Germany. Former “transatlanticists” in particular are distancing themselves from the F-35 procurement. Former Airbus CEO Thomas Enders, now president of the influential think tank German Council on Foreign Relations (DGAP), said last week, “Nobody needs the F-35”; Enders added that he “would be the first to cancel it under these new geopolitical conditions.” CDU foreign policy expert Roderich Kiesewetter also called for a “review of existing contracts with the US,” such as the F-35 purchase agreement, stating, “It is now absolutely essential to look for alternatives.”

Defense Minister Boris Pistorius, however, favors continuing with the F-35 purchase. One of the reasons he cites for this is nuclear sharing, whereby German Air Force fighter jets could drop US nuclear bombs in a war scenario. Observers note that dropping US nuclear bombs is already only possible on orders from Washington, making it irrelevant whether the F-35s could be paralyzed by the US as long as they are available solely for nuclear sharing. However, nuclear sharing itself is no longer considered secure.

Berlin has already transferred approximately $2.42 billion to Washington for the F-35 and has begun costly modifications at Büchel Air Base, where the US fighter jets are to be stationed.

Months after the European Parliament (EP) elections, the right-wing Alternative for Germany (AfD) is gradually establishing itself in Brussels and even seeking to expand the parliamentary group it leads.

A series of scandals during the European Parliament elections in June had caused the AfD to distance itself from other right-wing European parties, leading to more isolation in Brussels than ever before.

However, becoming the second strongest party in the recent general elections in Germany at the end of February, along with support from Elon Musk and a bilateral meeting with US Vice President JD Vance, has given the AfD international attention and, at least in some eyes, renewed legitimacy.

The AfD’s newfound prestige is particularly noticeable in the EP, where international cooperation is a daily routine. Once a solitary faction forced to form its own group after the EP elections, the party now wants to expand the European of Sovereign Nations (ESN).

Party sources speaking to Euractiv confirmed that the AfD is in talks with at least two potential new members. Greece’s far-right Niki (Victory) party and Spain’s “anti-establishment” SALF party have recently held discussions with the ESN.

A source close to the negotiations said, “We expect SALF leader Alvise Pérez to join as early as April or May.”

Just a few months ago, the AfD had been sidelined by like-minded colleagues in Brussels, citing espionage investigations and “inflammatory statements.”

Ultimately, the AfD was expelled from the Identity and Democracy (ID) group, the former right-wing group led by Marine Le Pen’s National Rally, who feared that their German friends could cost them votes ahead of the European and French elections.

Without its former allies, the Germans struggled to form their own faction in Brussels because most candidates had found places in more established structures.

Together with another group of right-wing groups, the AfD formed the ESN in the EP.

Subsequently, attitudes toward the AfD and ESN softened, particularly with the support of the Trump administration. Even the French felt compelled to approach the AfD again in Brussels, inviting them, along with the European Conservatives and Reformists (ECR) group led by Meloni’s party, to cooperate on issues of common interest.

Leaders of the AfD’s sister party in Austria, the Freedom Party (FPÖ), are also pleased with the end of tensions between the Germans and other right-wing groups.

“I think cooperation is extremely important, and I also think it is extremely important that at some point, perhaps one day, there will be a significant right-wing group in the European Parliament,” said FPÖ MEP Petra Steger to Euractiv on election night in Germany.

The two parties have always been close but recently split into two main groups in the EP: the Patriots for Europe (PfE) and the ESN.

The AfD now wants to stabilize and secure the ESN. “We do not provide information about confidential discussions. But you can be sure that at the end of the legislative period, the parliamentary group will be larger than it is today,” ESN Co-Chair René Aust told Euractiv.