Coalition Tensions Deepen Over Tax Cuts and Minimum Wage Plans

As Germany's CDU/SPD government nears formation, disputes over fiscal policies and coalition promises cast uncertainty on key reforms.

Friedrich Merz, likely Germany’s next chancellor, has stated that income tax cuts and a €15 minimum wage increase are not guaranteed and depend on public budget conditions.
Merz emphasized that the minimum wage will be determined by an independent commission, rejecting any automatic statutory increase.
The SPD and Greens have criticized Merz’s stance, arguing it undermines coalition commitments and risks public trust in the incoming government.
The coalition agreement’s reforms, including tax cuts and wage increases, are subject to strict financing conditions, creating friction among coalition partners.
International observers are closely monitoring the coalition's internal divisions, noting implications for Germany’s economic stability and leadership role in Europe.