The coalition negotiations of the CDU, CSU, and SPD are entering a critical phase as discussions move to leadership levels starting today, March 28, 2025, in Berlin. Following the completion of consultations in 16 working groups, the main negotiating team will convene to tackle the pressing issues ahead.
According to a joint statement from the party secretaries, Carsten Linnemann (CDU), Matthias Miersch (SPD), and Martin Huber (CSU), "We have a hard piece of work ahead of us, but we approach this task with a solution-oriented and constructive mindset." The groundwork for these discussions is based on the findings from the working groups that have been developing proposals since March 13, 2025.
The main negotiating group consists of 19 key representatives from the Union and SPD, including party leaders Friedrich Merz (CDU), Markus Söder (CSU), Lars Klingbeil, and Saskia Esken (SPD). They face a significant amount of work, particularly as many documents from the working groups contain unresolved issues.
One of the most contentious topics is taxation. The working group on finance has reportedly struggled to reach consensus on several critical points. For instance, the SPD is advocating for an increase in the top tax rate to 47 percent for individuals earning above 83,000 euros annually. They also propose raising the wealth tax to 49 percent and expanding the real estate tax. Additionally, the SPD wants to increase the interest and stock tax from 25 to 30 percent, while the Union, which had ruled out tax hikes during the campaign, must now negotiate compromises on these issues.
Another area of contention is defense policy. While the SPD insists on voluntary military service and a broad societal discussion on introducing a new service, the Union is pushing for the resumption of compulsory military service. The Union also aims to address the ongoing procurement issues by transferring certain major projects from the procurement office to an agency, as well as expanding the mandate for foreign deployments.
In terms of development aid, the Union seeks to integrate the Development Ministry into the Foreign Office, while the SPD wants to strengthen it. On housing and rent, there is relative agreement to extend the rent control measures for two years, with plans for an expert group to prepare penalties for landlords who violate these regulations.
Discussions around citizen's income and pensions remain complex. Social Minister Hubertus Heil stated that the negotiations will be tough, particularly regarding the citizen's income, where there is still uncertainty about how sanctions will be applied for those who refuse job offers. The SPD and Union plan to tighten the conditions for receiving citizen's income, emphasizing that every unemployed person must actively seek employment.
Moreover, the SPD proposes capping rent increases in tight housing markets to a maximum of six percent over three years, while the Union opposes any further restrictions on rent increases.
On energy efficiency, the coalition is considering a significant shift regarding the controversial heating law. The working group's paper suggests that the heating law will be abolished, and a new regulation will focus on long-term emission efficiency rather than short-term energy efficiency for individual buildings.
Health care funding is another pressing issue, with proposals to channel more tax revenue into statutory health insurance to stabilize rising contributions. The AOK has noted positive signs but warned that without expenditure caps, there could be legitimacy issues in disputes with other departments.
In public transport, the Germany ticket for local transport is to be secured long-term, but from 2027, there may be a significant price increase as the user financing share is expected to rise gradually. Furthermore, there are plans for a structural reform of the German Autobahn GmbH, which is responsible for the maintenance of many dilapidated bridges, while discussions about a general speed limit of 130 km/h on highways remain unresolved.
The Greens have criticized various proposals from the potential coalition partners, particularly those concerning migration control and sanctions on citizen's income recipients. Green interior expert Konstantin von Notz highlighted the renewed temporary suspension of family reunification for refugees with limited protection, arguing that it exacerbates suffering and hinders integration.
Green parliamentary group vice Andreas Audretsch cautioned against the proposed total sanctions for citizen's income recipients, labeling them as an "absurd sham discussion" that could foster resentment and mistrust towards those relying on social benefits. He emphasized that no one in Germany should be deprived of the necessary funds for basic needs, as affirmed by the Federal Constitutional Court.
As the chief negotiators prepare to discuss these proposals in the upcoming round of coalition talks, the outcome remains uncertain. The proposals from the working groups are subject to financial contingencies, and the negotiations will determine how these plans materialize in the final coalition agreement.
Ultimately, the negotiations reflect a significant moment for the CDU, CSU, and SPD as they seek to form a government that addresses the pressing challenges facing Germany. With a complex array of issues on the table, the coming days will be crucial in shaping the future direction of the coalition.
