Coalition committee: Union and SPD vanish improvement

After a bumpy start in the first 100 days, the Union and the SPD promised to work together more constructively during the upcoming reform projects. At a meeting of the coalition committee, the four party leader from the CDU, CSU and SPD admitted mistakes and quarrels in the first few months since the cabinet was sworn in in May, but called together to take a look forward. The meeting ended in the evening after almost four and a half hours including a press conference inserted in between.

Chancellor Friedrich Merz (CDU) announced, among other things, by the end of the year, cornerstones for a citizen benefit reform. SPD leader Lars Klingbeil spoke of an open and honest debate. It was agreed to “consider the security of jobs as a top topic”. CSU boss Markus Söder sees the black-red coalition and Germany as a whole overall weeks and months. “Today is important to find a new autumn force after the coalition’s summer depression.”

The decisions in detail:

Social reforms: Merz and BAS conciliatory

In the past few days there had been quite a bit between Merz and Minister of Labor Bärbel Bas (SPD). Now both are conciliatory. Merz expressly commits to the welfare state. “We don’t want to grind him, we don’t want to abolish him, we don’t want to shorten it,” he said. “We want to get it in its most important functions.” Therefore – there he is agreed with Bas – the welfare state must be reformed.

BAS said that she never contradicted the need for reform in civil allowance. “You don’t have to wear me here either.” She now wants to prioritize that jobs would be preserved and the economy was boosted. When asked about a claim from Merz, from the lecture after savings on citizenship money of five billion euros, BAS was cautious. “I always dampen the expectations.” Because: “It depends on the fact that the economy attracts.”

According to clear words between Merz and BAS, both met for dinner in the evening before the coalition committee. They would have “with two beers”, as the SPD leader said, well informed. Both could also live with clear words, added Merz.

Household: Klingbeil does not want a public dispute

The party leader wants to show political leadership when setting up the difficult federal budget in 2027. “I want to refrain from the fact that we will celebrate coalition sessions in the normal budget creation procedure for 2027 and celebrate public disputes if there should be one or the other,” said Finance Minister Klingbeil.

The party leaders would now make political decisions quickly and together, said the SPD chairman. Merz emphasized that all three partners were clear about the dimension of the task. It is not only about the federal budget 2027, but also about the budgets 2028 and 2029.

According to Klingbeil’s information, a gap of more than 30 billion euros in the 2027 budget. That has never existed before. The coalition must now present a total package as soon as possible, which gives an answer to how this gap should be closed. “It is clear that it will go fair,” emphasized Klingbeil. However, it was also clear that “we will all certainly be a bit of a difference in the negotiations for the household 2027”.

Steel summit in the Chancellery

Merz invites the battered steel industry to a summit in the Chancellery. “The goal is: We, I want us to get steel production in Germany in the long term. How we can achieve this goal we want to discuss with the producers and also with employee representatives,” said the CDU boss. Because of hard competition, especially from Asia, high energy prices and the economy weakness had recently produced the German steel industry significantly less steel. At the beginning of June, US President Donald Trump screwed up the tariffs on steel and aluminum imports to 50 percent- previously it was 25 percent. In addition, hundreds of additional products such as motorcycles and crane vehicles are occupied with steel and aluminum tariffs.

Dialogue with the car builders

The coalition also wants to seek ways out of the crisis with the German car manufacturers and their suppliers. Merz announced that he would invite an industrial policy dialogue to the future of the automotive industry. Not only the large manufacturers, but also the supply industry is suffering strongly at the moment, he said. “That is why I attach great importance to the fact that the supplier industry – and some of these are medium -sized companies – are there and have this discussion with us.”

Söder emphasized that one was not ready to leave China or other automotive markets to the future. “Everyone has to know: Without a car, Germany will not work industrially,” he emphasized.

The auto industry has to deal with sales, competition from China and the change to e-mobility. In addition, there is the customs dispute with the USA.