Overview

• The CDU and SPD leadership convened on March 28 to address key disagreements in coalition negotiations, including tax reforms, defense spending, and migration policies.
• Both parties face significant budgetary challenges, with a projected deficit of 30-40 billion euros complicating funding for proposed measures.
• The CDU is advocating for increased military spending, targeting up to 3.5% of GDP, while the SPD has yet to commit to a specific figure.
• The SPD seeks progressive tax reforms to increase contributions from high earners, a stance opposed by the CDU, which favors tax cuts.
• Party leaders, including Friedrich Merz and Lars Klingbeil, have emphasized fiscal discipline and realistic goals, signaling potential compromises to finalize the coalition agreement by Easter.