New German government’s program: Key policies and controversies

The parties likely to lead Germany’s next government are starting coalition talks, with a series of policies expected to come to the fore, including the systematic turning away of asylum seekers at the border.

The center-right Christian Democratic Union (CDU), its Bavarian allies CSU, and likely coalition partners, the Social Democrats (SPD), announced on Saturday that they would begin formal coalition talks.

Friedrich Merz, the likely next chancellor, stated on Saturday that in the informal exploratory talks, party leaders had identified a series of policy compromises as the basis for formal negotiations, which were the result of “very, very intensive” discussions.

“This was no easy task,” added the CDU leader.

According to the preliminary policy agreement (Sondierungspapier) of the coalition partners, seen by Euractiv, compromises that are “painful” for both sides are on the table, starting with government financing.

Last week, leaders presented plans for a debt-financed, pioneering investment package, which was not well-received by some in the fiscally conservative CDU.

In addition, the most controversial issues related to immigration, economy, and labor policy have been decided.

Here are the key policies agreed upon so far:

Border controls to be increased

– Border rejections: The parties promised to turn people away from the German border, even if they apply for asylum, one of the CDU’s most controversial promises, which the SPD had previously criticized for violating EU laws. As a compromise, it is stated that such rejections will be carried out “in coordination with European neighbors,” but no details are provided.

– More border controls: Merz promised to “significantly expand” existing controls at all German borders, which are exempt from the rules of Schengen, Europe’s passport-free travel area.

– Dual citizenship will continue: The parties will not withdraw legislation that facilitates obtaining German citizenship and dual citizenship, despite it being one of the CDU’s key promises. On the other hand, “supporters of terror, antisemites, and extremists” with dual citizenship may be stripped of their German citizenship.

Economic growth targets

– Commitment to growth: The leaders set a goal of returning the German economy, which has been in recession for two years, to a growth potential of over 1%.

– Protection of industry: Germany’s flagship industry will be supported by limiting energy prices, reducing bureaucracy, and a state agency that will help employ skilled labor abroad. The coalition will “avoid” penalties for the automotive industry that violate European CO2 targets, but there is no mention of reversing the controversial ban on the sale of new gasoline cars from 2035.

– Tax cuts: The tax burden for businesses and the “middle class” will be reduced through tax law reforms.

– Higher minimum wage: The parties find it “achievable” to increase the minimum wage by 17% next year, from €12.82 to €15, a key promise of the SPD.

– Trade agreement with America: In addition to its known support for the EU’s free trade agreement with the Latin American Mercosur bloc, the parties want to revive free trade negotiations with the US.

– Restriction of social benefits: As a promise of the CDU, the generous but controversial unemployment benefits introduced by the previous government will be reorganized, including total benefit cuts for those who refuse to work.

Green deal in danger

However, among the critics of the agreement are the Greens, whose support is needed for the two-thirds majority required to pass the financing package.

Green co-chair Felix Banaszak said the document “further distanced” the party from support and criticized the fact that “climate protection financing plays no role” in the document.

Anton Hofreiter, the Green Chairman of the European Affairs Committee of the Federal Parliament, said, “There is very little about fundamental improvements in our security policy.”

Aside from the financing plans, the document only confirms Germany’s responsibility for Europe’s security and its continued support for Ukraine.