Merz announces investment boost: Coalition plans economic turnaround!

Merz announces investment boost: Coalition plans economic turnaround!

The new coalition in Germany, led by Chancellor Friedrich Merz (CDU), has presented ambitious plans to stimulate the economy. On May 29, 2025, Merz announced that the first decisive measures would be taken by the summer holidays. In view of the current economic downturn, which is resulting in stagnation of the gross domestic product, the government believes that rapid relief is necessary.

Merz emphasized that the planned measures should be implemented “in quick succession”. The key points include better tax depreciation options for investments as well as measures to reduce bureaucracy and speed up approval processes. In addition, the coalition is planning a loan-financed special fund of 500 billion euros, which will flow into infrastructure and climate protection.

Quick implementation required

SPD leader Lars Klingbeil characterized the measures as an immediate program and emphasized that speed had to be increased. CSU boss Markus Söder also called for visible improvements by the summer. The last meetings of the Bundestag and Bundesrat before the summer break are scheduled for mid-July, which increases the time pressure for implementing the projects.

A central element of economic support is the so-called “investment booster”. This is intended to help companies make more investments in the form of declining depreciation. Many companies are currently holding back on investments, which underlines the urgency of this measure.

Criticism of high costs

The planned proposals come in a context in which business associations criticize high energy costs, taxes and long planning and approval processes. Rising social security contributions are also identified as an obstacle to economic growth. The coalition has already announced relief, including a reduction in electricity tax, in its coalition agreement.

In the deliberations of the coalition committee, which acts as the central planning body and is supposed to meet at least once a month, Merz reported a positive atmosphere. However, the committee consists of ten men and one woman, which has drawn criticism from the public.

The government is therefore faced with the challenge of developing quick and effective solutions to stimulate the economy and to follow up on announcements with action. The coming weeks will show whether the coalition's ambitious plans can become reality. Further details can be found in the reports from Süddeutsche.de and Yahoo Finance.