Coalition: Merz promises tax relief and job guarantees!

Coalition: Merz promises tax relief and job guarantees!

The first meeting of the coalition committee between the Union and the SPD took place on May 28, 2025. Led by CDU chairman and Federal Chancellor Friedrich Merz, the focus of the meeting was on strengthening the economy and securing jobs. Merz emphasized that the new coalition wanted to be a “coalition of enablers” in order to address the challenges of the international situation and the financial issues related to the federal budget. Deutschlandfunk reports that the coalition committee acts as an informal body of the leaders of the governing parties, which serves to clarify controversial issues and determine the coalition's line.

In his speech, Merz announced that tax relief and a reduction in bureaucracy would be decided in the coming months. In particular, companies should be able to write off high proportions of their investment costs in 2025, 2026 and 2027. In addition, approval procedures should be accelerated. A so-called high-tech agenda is also being launched to establish Germany as an “AI nation”, with investments in cloud and AI infrastructure as well as in linking AI and robotics.

Investment incentives and tax relief

The new black-red government plans to introduce a Germany fund to boost investments, which will provide at least 10 billion euros through guarantees or financial transactions. This should mobilize a total of at least 100 billion euros. According to economist Clemens Fuest, who describes the government's overall package as fiscally possible and investment-friendly, the creation of improved framework conditions for business start-ups will therefore play a central role. The aim is to reduce bureaucratic hurdles and make it possible to start a business within 24 hours. All applications and administrative procedures should be processed via a digital platform in order to simplify the process.

Furthermore, special relief is planned for energy-intensive companies. Merz also pointed out that the corporate tax rate should be gradually reduced from 2028. Relief through reduced electricity taxes and reduced levies is also in prospect.

Strategic economic guidelines

The coalition has also formulated ambitious goals in international trade. A free trade agreement with the USA should be sought and import duties should be reduced. The strategy towards China is being revised to both assess and reduce risks. A commission of experts will be formed to address these issues.

In addition, investments in critical infrastructure from abroad should be prevented if they contradict national interests. In the area of ​​climate protection, measures such as quotas for low-emission steel production and funding programs for the climate-friendly restructuring of the industry are planned. The process for capturing and storing carbon dioxide (CSS) is made possible for emissions that are difficult to avoid in industry and gas power plants. ZDF highlights that all of these measures are aimed at promoting an economic recovery in Germany while at the same time meeting the challenges of climate protection.