Germany’s Christian Democratic Union (CDU), under the leadership of Friedrich Merz, is advocating for sweeping economic reforms through its ambitious Agenda 2030 plan, which aims to lift the country out of its current economic malaise. After the tumultuous tenure of the previous coalition government, the CDU is positioning itself as the party of change, with solutions aimed at revitalizing the economy and restoring public trust.
Key elements of the Agenda 2030 revolve around significant tax cuts for individuals and businesses. Among the most notable proposals is the reduction of the corporate tax rate from 30% to 25%. This measure is part of the CDU’s larger vision to encourage investment and promote economic growth, which they aim to increase to at least two percent annually.
"Only with a healthy economy can one make good social policy in Germany," said Merz during the party's retreat where the plan was discussed, emphasizing the intertwined nature of economic health and social welfare.
Another central component of the plan is the gradual income tax reform. The CDU proposes to raise the income tax threshold, ensuring higher allowances for residents, and abolishing the solidarity surcharge completely. Current regulations would see the highest tax rates apply to incomes exceeding 80,000 euros, encouraging financial growth for higher earners without stifling lower-income workers. This plan signals the party's intent to lighten the financial burden on citizens and families.
Carsten Linnemann, the CDU Secretary General, echoed these sentiments, stating, "The trust has been deeply shaken in politics overall," reflecting the party's attempt to rebuild confidence among voters weary of administrative inefficiency and economic stagnation. With only 30% of voters supporting CDU and its sister party, the CSU, the urgency of implementing this agenda cannot be overstated.
Implemented over four steps beginning January 2026, advocates of the plan hope it will not only stimulate consumer confidence but also boost tax receipts through increased economic activity. The CDU believes they can recoup potential tax revenue losses resulting from these cuts with projected growth, which they argue will lead to additional tax income.
An important aspect of the economic strategy is the approach to welfare reform. The CDU plans to transition the current citizen’s income support to what they term "New Basic Income," intensifying the pressure on recipients to actively seek employment. "If someone is fundamentally not willing to accept work, even though they could work, the state must assume they are not needy," reads the plan. This statement reflects the party’s commitment to revamping the social support structure, fostering dignity through work rather than dependency.
Merz's plans also extend to adjustments within the energy sector, aiming to reduce electricity prices by at least five cents per kilowatt-hour. The current energy costs have been seen as prohibitive; lowering these rates, according to the CDU, would alleviate some financial stresses on families and individuals alike, allowing more discretionary spending.
Lastly, the CDU's Agenda 2030 includes the controversial proposal to reverse the planned EU-wide ban on combustion engines, which is scheduled for 2035. Such flexibility could boost not only the automotive sector but also help manage the local job market, which has faced challenges amid increasing regulatory pressures.
The party’s ambition is paired with caution, especially around the financial aspects of its reform strategy. Experts have estimated the cost of the tax restructuring could exceed 100 billion euros, raising concerns about effective financing. Christoph Ahlhaus, from the Federal Association of Small and Medium-Sized Enterprises, called the funding model for these reforms "the weak point" of the proposal, questioning the mechanisms available to cover the financial burden without exacerbation of national debt.
With promises of revitalizing both the economy and public trust, the CDU’s Agenda 2030 is set to be a pillar of their platform as they move toward upcoming elections. The advocacy for less bureaucracy, more business flexibility, and clearly defined economic policies marks the party's commitment to transformative governance. Whether these ambitious goals can translate to real change remains to be seen, but the call for bold actions echoes through the halls of German politics.