The Chancellor announces German government’s priorities

The document presented by Merz is a collection of the most urgent issues to be addressed, which the governing coalition parties — the Christian Democrats and the Social Democrats — agreed upon in their coalition agreement. The “Immediate Action Plan” (Sofortprogramm in German) is divided into three sections and comprises over 60 points.

Strengthening the Economy

Social Policy

To strengthen social cohesion, the government is planning a range of initiatives. These include measures to encourage the conclusion of more collective labor agreements in the economy, the extension of rent increase limits (known in German as Mietpreisbremse), and the establishment of a commission to revisit the reform of the electoral law for the Bundestag.

There are also plans to “launch a major pension reform,” which will consist of several components. According to CSU leader Markus Söder, the coalition intends to present its proposals as part of a comprehensive pension package.

This package will include, among other things, a guarantee that pensions remain at no less than 48% of average wages, an expansion of the so-called “mothers’ pension,”, tax relief for people who continue working after reaching retirement age and the introduction of an “early start pension” as a savings program for children.

Markus Söder did not specify when the entire package is expected to be passed.

State Developement

The coalition parties acknowledge that the investment process in Germany needs to become easier, faster, and more transparent. To that end, legal changes related to planning, construction, environmental protection, public procurement, and administrative procedures are planned by the summer.

The reforms are expected to cover a broad range — from procurement for the Bundeswehr, to the development of renewable energy sources, simplification of notarial procedures, and new regulations on agricultural fertilization.

As part of the investment initiatives, the coalition announced legislation to establish a special fund worth €500 billion — financed through new debt — designated for infrastructure and climate neutrality. According to previous information from the Ministry of Finance, the draft law is to be presented on June 25 alongside the 2025 budget proposal.

At the same time, a law will be unveiled regulating a €100 billion contribution from the federal states, as well as an “investment booster” allowing 30% depreciation write-offs for investments in equipment such as machinery, devices, and vehicles during the years 2025–2027.

Additionally, there are plans to gradually lower the corporate income tax (CIT) rate by one percentage point per year starting in 2028, reaching a total reduction of five points. “All of this will be bundled into a single law,” the chancellor announced.

Modern Germany

In the joint document, the CDU, CSU, and SPD announced a range of initiatives, covering both migration policy and improvements to the functioning of public administration through digitalization.

Among the planned changes are more effective measures to combat illegal employment, expanded investigative powers for the police, and simplified procedures for the culling of wolves to protect livestock such as sheep.

“Now everything will happen step by step,” Chancellor Merz assured after the first meeting of the coalition committee. He promised that some of the reforms will be implemented as early as the summer of 2025.