Rough Sailing in the Final Leg of Coalition Talks Between Union and SPD
Coalition talks between The Union and SPD are intensifying, entering a challenging final stage. - Turbulent concluding months of coalition bargaining loom for the EU and the SPD party.
By Monday at 5:00 PM, the workin' groups of Union and SPD are anticipated to churn out their interim reports from the coalition negotiations. Afterward, upper echelons will wrestle with thorny issues. This process may be boosted by the recent loosening of the debt brake for defense spending and the greenlighting of a special fund of 500 billion euros for infrastructure and climate protection.
Even though the special fund spans over a dozen years, translating to around 42 billion euros yearly, the wiggle room remains snug. Investments must be "additional" and not merely shuffled within the budget.
Miersch sees the priority for funds from the special fund in the education sector. "Takin' care o' our kids' education's a must," he told "Bild am Sonntag". "Schools are decayin', an' kids ain't got the best conditions." Education unions and associations clamor for massive investments and firm financial commitments from the special fund, estimating the need for the education sector at least 130 billion euros.
Miersch also advocated for a break on the cost of electric cars. "I'm all for an incentive - especially for folks who can't just afford a new set of wheels," he continued. Alongside a purchase premium, support for leasing options is also feasible.
After the end of the purchase premium for electric cars at the end of 2023, the registration numbers for electric vehicles dipped last year. The Union hasn't expressed support for its reintroduction in its election program, favoring "technology openness" for other drivin' forms instead.
Miersch stood firm on raisin' the minimum wage to 15 euros per hour. "That's written in the exploratory paper," he insisted. "An' I expect we'll have a minimum wage o' 15 euros from 2026." However, the final word on the minimum wage isn't set in stone yet. In mid-March, CDU General Secretary Carsten Linnemann stated that there was no fixed agreement on this.
The Union quests for corporate tax reductions, although progress on this matter remains elusive within the responsible working group. The financial scope of the likely coalition partners could contract rapidly, with the potential abolition of the solidarity surcharge, which is paid by high-income individuals and companies.
Over the weekend, economic associations urged the Union and SPD to focus on more than just payin' off debt. A "courageous reform agenda" is necessity, they warned in a joint letter. They stressed that economic dynamism should be self-sustaining and not just debt-financed.
The Social Association VdK cautioned against cuts in the social sector. "With the creation of the special fund, Friedrich Merz truly holds all the cards to bring German society together," VdK President Verena Bentele advised the Redaktionsnetzwerk Deutschland. "He should not squander this opportunity with short-sighted cuts to the social budget."
Contestin' Issues
- Migration Policy
- Stricter migration policies, including asylum procedures in third countries
- Stricter citizenship laws
- Limiting family reunification
- Financial Policies
- Taxation disagreements
- Union advocates for tax cuts, while the SPD seeks tax increases on high earners and the reintroduction of a wealth tax
- Controversy over inheritance tax with proposed greater exemptions for family inheritances
- Environmental Policy
- Possible delay in climate action with discussions to phase out coal by 2038 (depending on power plant development)
- Heating law aimed at reducing building emissions might be repealed
- Pension Reforms
- Union suggests longer working years
- SPD advocates for maintaining current rates through higher contribution rates
- Military Service
- Union supports reinstating mandatory military service
- SPD prefers it to remain voluntary
Fund Allocation for Infrastructure and Climate Protection
Though explicit details on the allocation of funds for the education sector from the special fund have not been revealed, the fund is meant to support major infrastructure projects and defense investments. Yet, broader investments in education or climate protection initiatives, beyond infrastructure projects, have not been explicitly outlined in these negotiations. Bookmark this space for more updates on these negotiations!
- SPD
- Coalition Talks
- Matthias Miersch
- Car
- Final Stretch
- BamS
- Minimum Wage
- Redaktionsnetzwerk Deutschland
- Education
- Sunday
- Purchase Premium
- Children
- Special Fund
- GEW
- Matthias Miersch, a key figure in the coalition talks between Union and SPD, emphasized the need for significant investments in education from the special fund, stating, "Taking care of our kids' education is a must."
- The employment policy is a central focus in the negotiations, with Miersch advocating for a break on the cost of electric cars and pushing for a minimum wage of 15 euros per hour from 2026.
- Economic associations have urged the two parties to prioritize a "courageous reform agenda" beyond just debt repayment, warning against overly debt-financed economic dynamism.
