Connect with us

Europe

Leaked draft reveals German coalition disagreements on key policies

Published

on

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

Fico accuses Merz of blackmail over threat to veto EU budget

Published

on

Slovak Prime Minister Robert Fico has hit back after German Chancellor Friedrich Merz threatened to veto the EU budget unless funding for Ukraine is secured.

Merz said he would block the EU’s seven-year budget if no agreement is reached on financial assistance for Ukraine.

The chancellor’s intervention has angered Central European leaders who are net beneficiaries of EU funds but do not want to take part in the next round of funding to support Ukraine’s war effort.

“What the chancellor is doing is typical blackmail, and I will not bow to it,” Fico told reporters in Bratislava.

Fico spoke alongside his Czech counterpart, Andrej Babiš, whose government has refused to participate in a future loan to Ukraine.

“I do not know why he said this,” Babiš said, referring to Merz’s stance.

Merz wants EU leaders to discuss Ukraine’s financing needs at a summit in Dublin on Friday.

In a letter to European Council President António Costa, who will chair the meeting, obtained by The Guardian, Merz wrote:

“We must maintain our support for Ukraine in its struggle to defend itself. This is our shared vital interest. Yet bilateral aid provided to Ukraine is distributed unevenly, with the burden shouldered mostly by only a few member states.”

The EU agreed last year to provide a €90 billion loan to Ukraine, intended to cover two-thirds of its military and civilian spending for 2026 and 2027.

Since then, however, Russia’s relentless bombardment has placed a heavier financial burden on Kyiv, prompting President Volodymyr Zelenskyy to ask for €70 billion to plug the budget deficit.

The EU has endorsed Zelenskyy’s figures and pledged to find €45 billion. Ukraine’s other allies, such as Britain and Canada, are expected to cover the rest.

Last year, Merz launched an initiative to tap €210 billion in frozen Russian state assets held in the EU, but the plan fell through due to opposition led by Belgium, which holds most of the funds in Brussels.

The €90 billion loan was the backup plan. Having opted out of that loan, Hungary, Slovakia, and Czechia indicated that they would not take part in the next round either.

Bulgaria joined these three member states following the election of Prime Minister Rumen Radev last April.

The question of funding for Ukraine is now spilling over into the fraught negotiations on the 2028-34 EU budget.

Germany, the largest net contributor, wants substantial cuts to the proposed budget and opposes the EU providing generous funding to member states that refuse to contribute to Ukraine’s financial needs.

Merz states in his letter that a “collective commitment without exceptions” is a “fundamental prerequisite” for closing Ukraine’s financing gap and for “discussing other matters, particularly those with financial implications.”

He also notes that, in the context of the EU’s next seven-year budget, known as the Multiannual Financial Framework, all member states must contribute to a “robust” financial perspective for Ukraine from 2028 onwards.

A German government official said:

“For the Multiannual Financial Framework (MFF) to be successfully concluded, it is vital that all EU member states provide financial support to Ukraine.”

Berlin is also aiming to shift decision-making on funding for Ukraine from unanimity to qualified majority voting, in an effort to prevent a single government from blocking EU decisions.

The letter reflects mounting frustration among the EU’s northern member states, Ukraine’s most generous backers, over lower contributions from other EU countries in Central and Southern Europe.

The task of brokering an agreement on the budget falls to Costa, the former Portuguese prime minister.

Costa wants a deal by the end of the year, ahead of elections in France, Poland, and Italy in 2027 that could complicate the process.

A spokesperson for Costa confirmed receipt of the letter without elaborating on details. “President Costa will dedicate time to the Ukraine issue at the informal European Council meeting in Dublin this week,” the spokesperson said, adding that funding for Ukraine would be addressed at a dedicated summit on the EU budget scheduled for 26-27 November.

Continue Reading

Europe

EU expects next Israeli government to adopt less aggressive posture

Published

on

The EU expects the next Israeli government to mend its “difficult relationship” with Brussels and adopt a more constructive approach toward Gaza and illegal settlements.

Israeli President Isaac Herzog tasked Gadi Eisenkot, the leader of the anti-Netanyahu bloc, on Sunday with forming a government.

Eisenkot stated that the country faces a “catastrophic diplomatic crisis” as traditional allies begin to reassess their relations with Israel.

Speaking to Rapporteur, several European diplomats stationed in Tel Aviv said they expect ties to get back on track.

“Whatever government comes in, we can try to revitalize relations because Israel is clearly a very important partner,” one European diplomat said, adding that Brussels expects the next administration to be “less aggressive”.

The diplomat noted that relations with Europe are currently “not very good”.

Israel cut off communication with Kaja Kallas, the EU high representative for foreign affairs and security policy, after Rapporteur revealed in June that she had compared Israel to apartheid-era South Africa during a visit to Mexico.

The diplomat stated that this decision, taken ahead of elections, was political in nature. A second European diplomat based in Brussels explained that the announcement came only a few days before an official visit by Dubravka Šuica, the European commissioner for the Mediterranean.

“This could have been interpreted as a tactic to divide Europe, but Israel had asked Kallas to deny the report; she did not do so,” the second diplomat said.

Brussels has repeatedly voiced its frustration with Israel over the humanitarian crisis in Gaza and the expansion of West Bank settlements.

However, EU governments blocked almost all sanctions proposed by the European Commission.

A third diplomat said opposition parties would “almost certainly take the issue more seriously” when it comes to tackling violence by West Bank settlers:

“We see Palestinians being expelled from their homes and new illegal settlements being built in the West Bank. There is a reluctance on the part of the current government to address this issue, which causes problems in our relations.”

The new government is expected to ease pressure on Palestinians and halt construction of the E1 settlement project, a controversial plan to build settler housing in the West Bank east of Jerusalem.

“They will probably try to deal with the problem of extremist settlers in the West Bank,” the diplomat added.

On Gaza, the diplomat described the situation as “a complete nightmare”, with two million Palestinians crowded into an area that accounts for roughly 35% of the territory.

“There are not enough tents for the winter, and not enough vaccines are reaching the area despite an increase in diseases,” the diplomat said.

The European official argued that Donald Trump’s peace plan met all the conditions for Europe. Although the EU had much to offer, neither the US nor Israel appeared interested in EU involvement in the process.

“We are currently training Palestinian police in the West Bank, and if permitted, we could do the same in Gaza,” the diplomat said.

The diplomat disclosed that Israel had agreed with Šuica that Europe would finance two projects aimed at improving sewage and water infrastructure in Gaza, continuing:

“However, none of these projects has started yet because there is a serious problem with dual-use goods. Getting materials into Gaza is very difficult because the Israelis say they could be misused if they fall into the wrong hands of Hamas.”

Israel insists that Hamas must be disarmed before subsequent phases of Trump’s plan can proceed.

With disarmament unlikely to happen in the near term, the EU argues that certain measures can be carried out in parallel.

“We can begin rebuilding sanitation systems in Gaza. We can start building desalination plants. We can begin providing energy and water to Gaza,” one diplomat said.

While Brussels hopes for progress on Gaza and the West Bank, it maintains that expectations regarding the establishment of a Palestinian state need to be “managed”.

The EU continues to advocate a two-state solution, yet most leading Jewish parties oppose the creation of a Palestinian state.

The diplomat noted that the next Israeli government will likely have “a very slim majority and not much room for manoeuvre”.

There is also a “major misunderstanding” between the EU and Israel that must be addressed. According to the diplomat, Europeans fail to recognize the “psychological impact” of 7 October on Israelis.

“This event changed the country and made the two-state solution even more distant than before,” the diplomat said.

In return, some Israeli politicians believe Europe has betrayed Israel despite what they view as a fight against “Islamist terrorism”.

“Their argument is that European politicians are somewhat afraid of the Muslim population in Europe,” the European diplomat said.

Europe strongly opposes Iran and the possibility of Tehran acquiring nuclear weapons, imposing sanctions in response.

However, the diplomat argued that the EU would not participate in a war because it lacks a common army:

“We are a diplomatic and economic power, which is why we resort to sanctions and diplomacy. The expectation that we would take part in a military operation is unrealistic.”

Continue Reading

Europe

Germany threatens EU budget veto over long-term Ukraine aid

Published

on

Germany has threatened to veto the European Union’s joint budget for the 2028-2034 period, which is currently under negotiation, unless every member state commits to providing financial support to Ukraine in 2027 and subsequent years, German Chancellor Friedrich Merz warned.

According to a report by the Financial Times (FT), Chancellor Merz set out Berlin’s condition for the budget talks in a letter addressed to European Council President António Costa.

In his letter, Merz wrote: “A collective commitment that every single one of us, without exception, will make a fair contribution to closing Ukraine’s budget deficit is an indispensable prerequisite for resolving this budget issue and, in particular, for addressing subsequent matters that carry financial implications.”

The German Chancellor stressed that a formula backed by all member states must be established to provide Ukraine with a reliable, multi-year financial perspective starting from 2028.

Merz also insisted that any agreed solution must cover the interest payments on debts incurred to finance the assistance provided to Kyiv.

Conversely, several countries within the bloc have cut financial aid to Ukraine, and the number of capitals adopting this stance is projected to rise next year.

In December 2025, Hungary, Slovakia, and the Czech Republic approved the EU’s 90 billion euro loan package for Kyiv only on the condition that they would not contribute to its costs themselves.

Alongside these three countries, Bulgaria has also stated that it does not plan to participate in subsequent financial assistance packages for Ukraine.

In France, far-right leader Marine Le Pen, who could potentially win the presidential election scheduled for spring 2027, recently told the FT that Paris has run out of funds.

Le Pen assessed: “The honest approach is to tell Mr Zelensky clearly, and even warn him: ‘Look, we cannot do more. We have already allocated the 90 billion euro EU loan, in which France’s share amounts to 18 billion euros. 18 billion euros is genuinely a huge amount of money.'”

The EU’s 90 billion euro loan, covering the 2026-2027 period, aims to meet two-thirds of Ukraine’s financing requirements.

Brussels expects the remaining 45 billion euros to be covered by other partners, including Canada, the UK, Norway, Japan, South Korea, and Australia.

Germany remains the largest net contributor to the EU budget.

In contrast, the four Eastern European countries seeking to avoid financing Ukraine rank among the largest net beneficiaries of the bloc’s budget.

Leveraging this balance, Chancellor Merz aims to use his influence in the EU budget negotiations to secure uninterrupted support for Kyiv in 2027 and the years beyond.

According to the FT, Berlin is also demanding that future aid packages be decided by qualified majority voting rather than unanimity, which is required under the current system.

A German government spokesperson told the newspaper:

“The issue of Ukraine’s financial needs must be resolved within the framework of the next EU budget. Financial support for Ukraine from all EU members is decisive for the successful conclusion of the budget talks.”

Continue Reading

MOST READ

Turkey