Europe
Leaked draft reveals German coalition disagreements on key policies
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.
Europe
Mutual accusations of blackmail and assault overshadow AfD state election congress in Germany
The Alternative for Germany (AfD) state congress in North Rhine-Westphalia ended in chaos on Sunday.
During the selection of the 22nd position on the candidate list for next year’s state elections, delegates aligned with the far-right Bundestag member Matthias Helferich proposed more than 100 candidates. This move was reportedly designed to block the vote in the town of Marl, halting progress on the list to force negotiations for subsequent positions.
Earlier in the candidate selection process, supporters of State Co-Chairman and lead candidate Martin Vincentz, who represents the moderate wing of the party, had prevailed. The defeat of Zacharias Schalley—a figure close to Helferich—by a candidate from the Vincentz camp triggered significant discontent within the radical wing of the party. Representing approximately 40% of the delegates, Helferich’s supporters reportedly demanded strong representation in the next state parliamentary group.
During the congress, Helferich claimed that Bundestag member Knuth Meyer-Soltau, a member of the Vincentz camp, physically assaulted him. Speaking to the newspaper WELT on Sunday, the 37-year-old Helferich described the incident:
“Meyer-Soltau was passing by the row where I was sitting. He was arguing with another member. When he turned back, while I was sitting in my chair, he shouldered me and shouted, ‘Shut up, you idiot!'”
Helferich added: “I do not know if he wanted to knock me out of my chair. However, because he insulted me in anger, I cannot rule out the possibility that this was a deliberate attack.”
An email exchange sent to the federal executive board and state management revealed that Helferich filed a criminal complaint on Monday.
“Meyer-Soltau hit my chair and my body, either intentionally or through negligence”
In the complaint filed by Helferich, he stated: “Meyer-Soltau hit my chair and my upper body hard, either intentionally or through negligence; I was only able to avoid falling by holding onto the edge of the table.” The complaint also named two witnesses.
In his letter to the party leadership, Helferich wrote: “Since numerous similar incidents of electoral law significance occurred at the state election congress, I believe the duty to maintain party order falls to the Federal Executive Board.”
Meyer-Soltau, a 61-year-old lawyer like Helferich, denied the allegations. Speaking to WELT on Sunday, the lawmaker said: “I reject the accusation being made.”
Meyer-Soltau suggested that Helferich viewed him as a powerful opponent because he had previously acted as the negotiator for the state executive board in the party’s expulsion proceedings against Helferich before the Federal Arbitration Court. The party court recently rejected the expulsion request.
“It is clear that this situation has not had a positive impact on our relationship,” Meyer-Soltau said. “Mr. Helferich, having suffered a heavy defeat at the nomination meeting, is clearly seeking satisfaction through other means. I will hand the matter over to my lawyer and take legal action.”
A letter sent to Helferich by Meyer-Soltau’s lawyer, which was leaked to the press, stated: “My client has never insulted you or physically assaulted you.” The letter demanded that Helferich cease repeating the claim and sign a cease-and-desist declaration carrying a contractual penalty.
Additionally, Meyer-Soltau’s lawyer filed a criminal complaint with the Dortmund Prosecutor’s Office for defamation. The petition submitted to the prosecutor’s office stated: “The accusation of physical assault is highly defamatory, calculated to permanently damage my client’s public reputation, and socially discredit him.”
Allegations of blackmail made against delegates at the congress
Allegations of threats against delegates also emerged at the state congress in Marl. Helferich ran against Klaus Esser, a close associate of Vincentz, for the 13th position on the candidate list. Esser, who needed just one vote to be elected in the first round, only secured a majority in the second round of voting.
Following the announcement of the results, a delegate took the stage to claim that before the second round, a state executive board member from the Vincentz camp went to the rows of the Wuppertal district association and threatened that a state lawmaker from Wuppertal would be expelled from the parliamentary group if the necessary votes for Esser were not delivered. The delegate announced that a complaint would be filed regarding the matter.
A spokesperson for AfD Co-Leader Alice Weidel told the media outlet “The Pioneer”: “Weidel does not approve of this situation. Such things must not happen.”
Other allegations of threats were voiced through the hall microphones during the congress. One delegate claimed that a candidate had been threatened by a district councilor and a district chairman.
“He was told that if he did not withdraw his candidacy, he would have no future in this party. There are numerous witnesses who can confirm this,” the delegate asserted.
Another delegate reported that a young woman was pressured by a district chairman who asked whether she would “lend herself to this game and submit to blackmail,” warning her that the situation would have “consequences for her in the district association.”
Marco Vogt, the Deputy Chairman of the Düsseldorf AfD and an ally of Helferich, said during his candidacy speech that young members who participated in the list disruptions had been threatened by their employers present in the hall.
Another candidate, a municipal councilor from Würselen, stated that a district administrator from the Aachen region had issued an implicit threat, telling him he would make many enemies in his own association if he did not withdraw his candidacy.
Candidate Leon Biallawons directly targeted lawmaker Knuth Meyer-Soltau, saying: “I tell you clearly, dear Knuth, I will not allow myself to be threatened by you. Because, dear Knuth, it is not you but the grassroots who will decide who succeeds in this party, and the grassroots will assert their will in the long term.”
Meyer-Soltau declined to comment on these allegations, stating: “I do not wish to comment on such baseless claims.”
Other tactics were used to slow down the proceedings at Sunday’s congress. One delegate requested a 30-minute recess because “there is an ice cream truck outside,” though this request was rejected. The convention manager, Julian Flak, was heard calling out to a delegate: “Take that garden furniture outside immediately!”
A message shared on Saturday in a chat group close to Vincentz stated that the “self-proclaimed patriotic group” had threatened to completely block the congress. It was alleged that the core group led by Helferich planned to deliberately disrupt the flow of the congress to force their opponents to the negotiating table.
Weidel accused of undermining efforts in chat group
On Sunday, in the same chat group, it was written that the sabotage action was being coordinated by Federal Deputy Chairman Sven Tritschler and Helferich. The message claimed that Tritschler had discussed the move with “his boss Alice Merkel”—a reference to AfD leader Alice Weidel. “This is a clear operation of attrition. We will not bow to an Alice Merkel,” the message read.
By Monday night, the ballot for the 22nd list position contained the names of 81 candidates. Some individuals who announced their candidacies withdrew before speaking. The results are expected to be announced next weekend.
The North Rhine-Westphalia AfD association has allocated a total of four weekends for candidate selection meetings. With the party projected by public opinion polls to win between 30 and 40 seats in the state parliament, competition for the top spots on the list remains intense.
An article titled “AfD-NRW Grassroots Resist Cartel Partyization,” published Monday on a Telegram channel close to Helferich, described the events as a “heroic act” and an “impressive reaction of an alert, idealistic grassroots.” The mass candidacy process was characterized as a “combination of Carl Schmitt’s partisan theory with a democratic liberation move unprecedented in AfD history.”
The article argued that if lead candidate Vincentz wants to translate polling success into a strong election result, he must unify the party by granting Helferich’s supporters viable, electable positions on the list.
Europe
EIB to unveil 15 billion euro tech initiative to scale European startups
The European Investment Bank (EIB) will announce a €15 billion initiative today, in collaboration with EU capitals and private investors, aimed at supporting the growth of European technology companies.
For decades, startups on the continent have struggled to raise the large-scale funding rounds necessary to scale on this side of the Atlantic, frequently turning to US investors or relocating abroad as they expand.
“We are catching up. Now we need to accelerate,” EIB President Nadia Calviño said.
Under the existing European Tech Champions Initiative, the EIB had already pooled resources with six EU governments to establish funds that invest in high-growth companies across the EU.
Calviño described the initiative as “very successful,” noting that it has supported 12 European “unicorn” companies valued at over $1 billion, including the German artificial intelligence translation firm DeepL.
The bank is now expanding the program with a new phase nearly four times the size of the original.
Twenty-five EU governments, alongside private investors such as Santander and Danske Bank, are expected to participate in the program.
This initial €15 billion aims to mobilize up to €80 billion in total investment. Calviño stated that this estimate is based on the multiplier effects achieved under previous programs.
As part of these efforts, the EIB also aims to attract European pension funds, which manage immense pools of capital but have historically allocated fewer resources to technology investments compared to their US counterparts.
In addition to the new funding, Calviño noted that the EIB will create a platform providing a single point of access for existing European scale-up initiatives, including the European Commission’s Scaleup Europe Fund, France’s Tibi initiative, and Germany’s Win initiative.
Europe
Germany to purchase US Tomahawk missiles to build own long-range strike capability
Germany will purchase Tomahawk cruise missiles from the United States and deploy them on German territory, Chancellor Friedrich Merz announced on Thursday.
The move marks a shift away from planned US deployments and toward Germany establishing its own long-range strike capability.
Merz told lawmakers that he finalized the agreement with the US government during the NATO summit in Ankara, adding that the talks held on Tuesday and Wednesday had exceeded his expectations.
“While we close a critical strategic gap in our defense, we are also working to develop our own European systems and deploy them in Europe,” the Chancellor said.
According to German government sources, Washington committed in a letter of intent signed on Tuesday to approve Germany’s acquisition of Tomahawk missiles and their land-based Typhon launchers in August.
The number of missiles and launchers Germany plans to purchase was not disclosed because the information is classified.
The planned acquisition appears aligned with US President Donald Trump’s pressure on European allies to cover their own security costs, such as by purchasing US weapons.
The fate of the Tomahawk procurement had become uncertain after Trump announced in May that he would reduce the US military presence in Germany.
That development was seen as a cancellation of a plan made under the previous administration to deploy a US battalion equipped with long-range Tomahawk missiles to Germany.
That original plan was designed as a temporary solution to serve as a strong deterrent against Russia while Europeans developed their own versions of such weapons.
Germany produces its own cruise missile, the Taurus, but its range of approximately 311 miles is three to five times shorter than that of the Tomahawk missiles.
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