Overview
- Negotiations are urgent with the Haushaltsausschuss Bereinigungssitzung due Thursday and several billion-euro items still unresolved between the CDU/CSU and SPD.
- Unions leader Thorsten Frei publicly rejected the planned plastic-packaging tax, leaving a roughly €800 million hole in next year’s revenue plans that the government had counted on.
- Union state leaders are pushing Chancellor Friedrich Merz for a universal cut to the electricity tax that would cost about €5 billion a year, while the SPD resists major cuts to Wohngeld and proposed reductions in Bürgergeld/Grundsicherung.
- Technical numbers from the Herbst-Steuerschätzung raise gross revenues by about €3.9 billion but the debt-brake reduces allowable borrowing by €2.5 billion, leaving only about €1.4 billion of net room for 2027.
- Municipal budgets face deep strain after a preliminary €31.9 billion 2025 deficit and a KfW-estimated €231.2 billion investment backlog, and economists warn the draft relies on heavy new borrowing and leaves a projected €115 billion medium-term financing gap.