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Bundestag Debates Merz Government’s 2025 Budget as Unions Demand Social and Climate Funding

Deferring household electricity tax relief to the manufacturing sector has fueled criticism over broken coalition promises.

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Overview

  • Finance Minister Lars Klingbeil’s 2025 proposal allocates €503 billion in spending, a 6.1 percent increase from 2024, including €81.8 billion in new loans and over €60 billion from debt-funded special assets.
  • Record investments of €115 billion mark a 55 percent rise over last year and draw on the core budget, special funds and the climate and transformation fund.
  • A coalition of unions and social and environmental welfare groups is calling for grant-based financing for pensions, healthcare, social infrastructure and climate protection rather than loan-backed allocations.
  • Since January, provisional budget rules have prevented new programs from starting until the full 2025 budget is approved by the Bundestag.
  • Analysts warn of potential financing gaps of around €144 billion between 2027 and 2029 due to slower tax-revenue growth and rising social-insurance subsidies.