Overview

• Chancellor Friedrich Merz warned of an arduous autumn and said key reform projects will be taken up after the summer recess.
• Senior CDU/CSU and SPD figures adopted a more conciliatory tone to create space for agreement after weeks of public disputes.
• Merz argued the welfare state in its current form is no longer financially sustainable, while SPD leaders defended it as a core democratic achievement.
• Merz ruled out raising income tax for medium-sized companies, and CSU leader Markus Söder vowed no tax increases with the CSU.
• Merz meets Union leaders today for coordination, with a joint retreat in Würzburg on Thursday, as unresolved fights over the electricity tax, court appointments, and social policy persist under mounting fiscal pressure.