Germany’s new CDU / CSU-SPD government has finalised its coalition agreement. What policies have the parties agreed upon, and how will they shape life in Germany in the coming years?
Nearly seven weeks after the federal election and following four weeks of negotiations, the incoming German government has finalised its coalition agreement.
Negotiations turned around significantly more quickly than in previous years, due to external pressure coming from Donald Trump’s newly imposed tariffs and rising support for the far-right Alternative für Deutschland (AfD), which has just topped voting intention polls for the first time.
Speaking at a press conference in Berlin, leaders of the coalition parties, the Christian Democratic Union / Christian Social Union (CDU / CSU) alliance and the Social Democratic Party (SPD) said that the agreement contained elements that nobody would have speculated about in recent weeks and that elements which may have previously been considered certain had been removed.
Chancellor-elect Friedrich Merz said the agreement sent a “clear signal” that it would take a “new course in migration politics” and showed that “Europe can rely on Germany”. SPD co-leader Lars Klingbeil said that young people across the world should know that coming to live in Germany is still worth it; “The construction diggers have to function and the fax machines need to be thrown away”.
The leaders announced which government ministries would be assigned to which party. The CDU / CSU will run the Foreign Ministry for the first time in 60 years, as well as the ministries for the interior, research and technology, agriculture, education and family, health, transportation and a new ministry for digitisation. The SPD has been assigned the ministries of finance, defence, justice, work, environment, and building and housing.
So what new policies has the coalition agreed to implement? Merz outlined that Germany’s tax on electricity would be reduced to the European minimum, the gas price levy would be abolished, and there would be an industrial electricity rate.
Citizens’ allowance (Bürgergeld) will be scrapped in favour of a “basic support income” (Grundsicherung), and the “work and stay” policies, such as the Chancenkarte, will remain. Germany will scrap some voluntary family reunification programmes it has for refugees from certain countries, and "highly integrated" migrants will only be eligible for German citizenship after five years of residence, rather than three.
Regarding domestic security, Merz explained that authorities will be allowed to retain IP address data for three months and police will be granted more power. A German security council will also be developed. Defence spending will increase, and Germany will work according to the Swedish model to recruit more volunteers for military service.
Merz claimed the government would be more bureaucratically efficient and offer further digitised services, while the number of civil servants would be reduced to save money. The Handelsblatt reported that the coalition agreement plans no tax increases; instead, hours worked overtime will be tax-free, and a tax-free “active pension" will be introduced. The structure of the working week will also change, with limited weekly, rather than daily hours.
SPD co-leader Saskia Esken added that Germany’s current, Nazi-era abortion laws would be amended to make access and cost coverage easier. The BAföG student loan will be “improved” and the Deutschlandticket will continue.
Now that the coalition agreement has been finalised, it must be approved. Each of the three parties involved in the coalition will seek approval for the agreement in different ways. The CDU will hold a vote on the agreement at its party convention, which will likely be held at the end of April.
The CSU has said only members of its steering committee will have to vote in favour of the agreement for the party to offer its overall support. Meanwhile, the SPD’s 375.000 members will vote on the agreement; this process is expected to take around 10 days.
This takes us to late April. If the agreement is approved by all sides, the parliament can elect a chancellor, who will almost certainly be Friedrich Merz. Following this timeline, Merz will become the German chancellor on May 7, 2025.
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