New German Coalition Outlines Economic Recovery Plan, Tackles Budget Gap
The new coalition government, led by Friedrich Merz (CDU) and Barbara Bas (SPD), has outlined its priorities for the coming months. They aim to boost the economy, support key industries like steel and automotive, and maintain the social security. Meanwhile, Finance Minister Lars Klingbeil (SPD) has begun tackling a significant budget gap for 2027.
Merz and Bas have emphasized common goals, putting aside previous disputes. They plan to initiate social reforms and set the course for economic recovery by fall. To maintain long-term steel production, Merz has invited industry representatives for a summit. He also plans to invite automotive industry representatives for a dialogue on the industry's future.
Klingbeil has been tasked with addressing a 30-billion-euro gap in the federal budget for 2027. He plans to close this gap through hard decisions and structural reforms. His approach includes pragmatic measures to reduce bureaucracy, investments in key areas like defense and climate, and a comprehensive package to cover 2027, 2028, and 2029. Klingbeil aims to avoid all-night coalition meetings and public disputes during these negotiations.
Merz also plans to rely on a reform of the citizen's income, prepared by Bas, with further consultations planned. The coalition partners have acknowledged mistakes in the first 100 days of their government alliance and are committed to learning from them.
The coalition partners have set clear priorities for the coming months. They aim to support key industries, maintain the social security, and close a significant budget gap. By inviting industry representatives for dialogue and planning social reforms, they hope to set Germany on a course for economic recovery. The government is committed to learning from past mistakes and avoiding public disputes during negotiations.
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