Lindner expresses fear towards the traffic signal.
News Article: Economic and Climate Policies Differ Between Traffic Light Coalition and Union in Germany
The political landscape in Germany is witnessing a significant shift as the upcoming elections approach, with the Traffic Light Coalition (SPD, Greens, FDP) and the Union (CDU, CSU) presenting contrasting economic policies, taxation strategies, and approaches to climate protection.
Economic Policies
The Traffic Light Coalition, led by Olaf Scholz (SPD), Annalena Baerbock (Greens), and Christian Lindner (FDP), has embraced increased public investment and borrowing after years of fiscal restraint. Their focus is on future-oriented expenditures such as infrastructure, education, digitalization, climate protection, and defense. The 2025 budget allowed for a record 115 billion euros in investments, with plans to increase spending further on climate and infrastructure [2].
In contrast, the Union, under Chancellor Friedrich Merz since early 2025, emphasizes reviving economic growth and cutting bureaucracy. They are actively engaging private companies to invest heavily (631 billion euros pledged) in capital projects and R&D to restore confidence and structural reform [3][5]. Merz prioritizes reducing labor costs and reforming social systems to improve the investment climate [5].
However, the Traffic Light Coalition has faced internal conflicts on economic policies, especially between the Greens and FDP, which eventually led to its collapse in late 2024 [4].
Taxation
Explicit recent differences on taxation are not detailed in the search results; however, historically and by coalition tendencies, the SPD and Greens often favor more progressive taxation aiming to fund social and climate programs. The FDP and Union usually push for lower taxes and economic liberalization to stimulate business growth [6]. The new government under Union leadership appears focused on improving the business climate partly by addressing labor and tax-related reforms to reduce costs and encourage investment [5].
Climate Protection
The Traffic Light Coalition prioritizes substantial financial commitment to climate protection, making it a central part of their record investment plans [2]. The Greens especially pushed for accelerated energy transition and green infrastructure. Challenges for Germany’s energy transition remain pressing, with warnings that the country risks falling behind on climate goals, indicating that the coalition’s efforts faced implementation hurdles [1].
The Union's economic priorities under Merz include energy infrastructure investments but with a stronger focus on economic growth and industrial competitiveness; specific climate policy emphasis is less prominent in recent sources but is part of the broader energy and infrastructure investment plans supported by the Germany Fund for strategic sectors including energy [5].
Comparison Table
| Aspect | Traffic Light Coalition (SPD, Greens, FDP) | Union (CDU, CSU) | |-----------------------|------------------------------------------------------|----------------------------------------------| | Economic Policy | Increased public investment, borrowing, social spending; fiscal expansion focused on infrastructure, education, climate, defense | Boost private investment, cut bureaucracy, labor/social reforms; focus on structural economic growth and business confidence | | Taxation | Generally more progressive to fund social and climate goals (implied) | Favor lower taxes, reduce labor costs, improve investment climate (implied) | | Climate Protection | Heavy emphasis on climate protection and energy transition with high investment commitments | Supports energy infrastructure, but with greater emphasis on economic competitiveness and strategic investments; climate a part, but less dominant |
This comparison is based on recent developments through mid-2025, including the collapse of the Traffic Light Coalition and the new Union-led government's policies [2][3][4][5]. The Greens have presented a detailed climate protection program that aims to transform Germany into a nation primarily using cargo bikes. The Union has more coalition options than the SPD, and the FDP leader believes it is most likely that the Union will be the strongest force. Lindner rejects tax increases as non-negotiable.
As the Traffic Light Coalition and Union in Germany approach the elections, their disparate policy-and-legislation, particularly on economic policies and climate protection, dominate the general-news landscape. While the Traffic Light Coalition emphasizes increased public investment, focusing on future-oriented expenditures, the Union prioritizes reviving economic growth through private investment and labor reforms. In terms of climate protection, the Traffic Light Coalition is heavily focused, prioritizing substantial financial commitments and an accelerated energy transition, while the Union supports energy infrastructure investments with a stronger focus on economic competitiveness.
