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Coalition Seals Overnight Deal on Welfare, Pension and Transport Reforms, Defers 2035 Engine‑Ban Stance

Funding reallocations now pave the way for targeted e‑car incentives plus new road building.

Overview

  • The government will replace Bürgergeld with a stricter Grundsicherung, including 30% cuts after a second missed Jobcenter appointment and potential suspension of benefits up to housing costs after repeated no‑shows, with safeguards for health‑related cases.
  • An Aktivrente allowing pensioners to earn up to €2,000 per month tax‑free is slated for cabinet approval next week with a planned start on January 1, 2026.
  • A new e‑car purchase program aimed at low‑ and middle‑income households will be financed using the EU Social Climate Fund plus €3 billion reallocated from the Climate and Transformation Fund through 2029.
  • Infrastructure plans include an additional €3 billion for new road construction and a pledge to advance all shovel‑ready projects, funded by shifts within existing special funds, including unused microelectronics allocations.
  • No unified position was reached on the EU 2035 combustion‑engine ban, with leaders opting to consult industry at an auto summit and to track the European Commission’s forthcoming review.