Government plans | Coalition committee meeting: Work for recovery announced

The leaders of the CDU/CSU and SPD demonstrated unity after their meeting, announcing their intention to swiftly implement social reforms and lay the groundwork for economic recovery in Germany in the fall. In light of the internal coalition dispute during the first 100 days of the governing coalition, the leaders of the CDU, CSU, and SPD admitted mistakes. CSU leader Markus Söder said after the coalition committee meeting on Wednesday evening that they wanted to find a "new autumn force" "after the summer depression." However, the meeting participants did not present a list of concrete projects or a timetable for their implementation.

Chancellor Friedrich Merz (CDU) and Social Affairs Minister Bärbel Bas (SPD) have been sparring over social costs in recent days, both in appearances and interviews. Now both emphasized common goals. Merz is pushing for a reform of the citizen's income, which Bas has already prepared, but further consultations between the four party leaders are planned. "I expect that we will agree on the most important cornerstones of such a reform before the end of this year, so that a reform of the so-called citizen's income will then be implemented quickly," Merz said.

Merz emphasized again that the benefit would then become the "new basic security." "Abuse" should be more tightly controlled. People should be encouraged to enter or return to the labor market.

Meanwhile, SPD co-leader Bas responded to Merz's demand for annual savings of five billion euros from the citizen's income. "I always temper expectations." Because: "It depends on the economy picking up." Only if that happens will the costs of transfer payments decrease significantly, the Labor Minister emphasized: "If we get 100,000 more people into work, that's definitely one to two billion, which we'll then also save." Bas added that she has never denied that there is a need for reform of the citizen's income, regardless. "You don't have to drag me around here either."

"If we put 100,000 more people into work, that would amount to one or two billion, which we would then also save."

Bärbel Bas, Federal Minister of Social Affairs

The day before the summit meeting at the Chancellery, Merz criticized Bas in an interview for calling his statement that "we" "simply can no longer afford" the welfare state in its current form "bullshit." However, at a conciliatory dinner the day before the coalition committee, they had a good conversation and defined a common goal, both reported, according to Bas, "over two beers."

Merz then explicitly declared his support for the welfare state: "We don't want to dismantle it, we don't want to abolish it, we don't want to cut it," he emphasized. "We want to preserve its most important functions."

Meeting with representatives of the steel and automotive industries

In keeping with Bas's declared priority on boosting the economy, the coalition partners emphasized their efforts to promote Germany as an industrial location. The Chancellor is hosting two summits. For a summit with the struggling steel industry in the Chancellery, the goal is "to maintain steel production in Germany in the long term," he said. They want to discuss this with producers and employee representatives. Due to fierce competition, especially from Asia, high energy prices, and the economic downturn, the German steel industry has recently produced significantly less steel. Now, the extremely high US tariffs are adding to the problem.

Merz also wants to invite participants to an industrial policy dialogue on the future of the ailing automotive industry. Not only the major manufacturers are struggling, but the supplier industry is also suffering greatly at the moment. Söder emphasized that they are not prepared to leave the future to China or other automotive markets.

For now, the question of how the CDU/CSU and SPD intend to fill the €30 billion hole in the 2027 federal budget remains unresolved. Finance Minister Klingbeil does not want the negotiations on this to become a real test of endurance. "I want to avoid having to engage in all-night coalition meetings during the normal budget preparation process for 2027 and celebrating public disputes, should there be one at one point or another," he said.

Merz emphasized that all three partners were aware of the magnitude of the task. It involved not only the 2027 federal budget, but also the 2028 and 2029 budgets. Klingbeil said the coalition must now present a comprehensive package as quickly as possible that provides an answer as to how the gap should be closed. "It will be done fairly," Klingbeil promised. Left Party parliamentary group leader Heidi Reichinnek accused the coalition of lacking a plan. "This forced show of harmony could not disguise the fact that the coalition has no plan for how it intends to plug the foreseeable, huge holes in the budgets," she told the Funke Media Group newspapers. dpa/nd