Union and SPD Agree on Coalition Contract After Five Weeks: Key Highlights
Coalition agreement reached between the Union and SPD political parties
There's some exciting news emerging from Germany five weeks post the federal election. Union and SPD have finally agreed on a coalition contract, according to RTL/ntv's sources. This breakthrough came during an evening's high-level meeting, with details remaining to be ironed out.
The coalition comprising CDU, CSU, and SPD is expected to announce the agreement's specifics at noon tomorrow.
Here's a glimpse of what the agreement may entail:
Climate and Energy
The new coalition is determined to tackle climate change, pledging to attain climate neutrality by 2045. The agreement aligns with EU goals, like reducing emissions by 90% by 2040, and offers a possible 3% leeway through international climate projects[1][3].
To lower energy prices for households and industry, plans are afoot to reduce electricity tax to the European minimum and scale back grid fees[1]. The coal phase-out deadline of 2038 will be maintained[1]. Hydrogen economy support is also on the agenda, incorporating varying hydrogen production methods[1]. Greenhouse gas emissions from industrial processes and gas-fired power plants will be addressed with requisite CCS legislation[1].
Economic and Financial Measures
To stimulate the economy, income tax reductions are anticipated for low and middle-income earners, slated for implementation within two years. The solidarity surcharge remains for higher earners and businesses[2]. Amended depreciation rules will bring tax relief to companies, with proposed decreased corporate tax rates post-2027[2]. Cutting Germany's development aid due to budget constraints is also on the table[3].
Social and Labor Policies
Active participation in employment markets is a proposed requirement for recipients of the renamed citizen's benefit[2]. A minimum wage of €15 per hour is planned for next year[2]. Support for students can skyrocket owing to higher cost-of-living allowances for those living away from their families[2]. Parental leave rights and parental allowance enhancements are under consideration for self-employed mothers[2].
Defense and Security
Enlisting volunteers in the Bundeswehr might become a reality, along with mandatory registration and surveillance systems[2]. Improved crisis management can be achieved through the formation of a national security council[2].
Other Key Policies
Favoring e-mobility, enhanced rail investments, and scrapping electric vehicle quotas are some of the transportation concerns addressed in the agreement[1]. Sustainable agricultural practices will see support, though specific policy details remain undisclosed.
This agreement is subject to party ratification and could pave the way for a new government in early May 2025[2][4].
Stay tuned as more details about the coalition contract are expected to unfold soon.
[1] ntv.de[2] jwu[3] Reuters[4] Deutsche Welle
- NTV reported that the union and SPD have agreed on a coalition contract, but the final details are yet to be ironed out.
- Employment policy will include a requirement for recipients of the renamed citizen's benefit to actively participate in employment markets, and a minimum wage of €15 per hour is planned for the next year.
- In the defense and security sector, the agreement proposes the enlistment of volunteers in the Bundeswehr and the formation of a national security council for improved crisis management.
