Chancellor Merz: Immediate program to strengthen the economy before the start!

Chancellor Merz: Immediate program to strengthen the economy before the start!

On May 28, 2025, Chancellor Friedrich Merz announced a comprehensive “immediate program” to support the economy in the first coalition committee of the Union and the SPD. The aim of the measures is to bring about noticeable relief and reforms by the summer break. Corresponding laws could come into force as early as July Deutschlandfunk reported.

Merz particularly emphasized the need for tax relief for companies in order to increase competitiveness. Planned measures include, among other things, better tax depreciation options for investments. Reducing bureaucratic hurdles is also on the agenda. The program also includes the creation of a loan-financed special fund of 500 billion euros intended for infrastructure and climate protection. The aim is to provide an “investment booster” through declining depreciation in order to create additional incentives.

Economic relief and social reforms

The coalition pursues the goal of a “coalition of enablers”. Finance Minister Lars Klingbeil from the SPD promised that the measures will bring noticeable changes for people. CSU boss Markus Söder used the opportunity to point out planned projects for state pensions. A guaranteed pension level of 48 percent, a mother's pension as well as the active and early start pension are planned.

The agreement on the emergency program comes at a time when relief and reforms already announced in the coalition agreement were called for. Concrete data on the planned projects within the program are largely missing, but preparations are underway. From January 1, 2026, VAT is to be reduced for the catering industry, the commuter allowance is to be increased and the agricultural diesel refund is to be reintroduced.

Criticism and challenges

The implementation of some measures also depends on the approval of the federal states, which is met with resistance in some cases. Critics see the commuter allowance and the VAT reduction for the catering industry in particular as controversial. The coalition committee will subsequently meet at least once a month to review progress and make necessary adjustments.

The composition of the committee, which consists primarily of ten men and only one woman, was also viewed critically. Participants include the leading figures of the CDU, CSU and SPD, including Friedrich Merz, Jens Spahn, Markus Söder and Lars Klingbeil. The notes are kept by a team of CDU and SPD representatives.