Overview

• Chancellor Friedrich Merz announced a steel summit at the chancellery and a separate dialogue with the automotive sector to safeguard production and jobs under pressure from US tariffs, high energy costs and Chinese competition.
• Merz is pressing for about €5 billion in savings from Bürgergeld as part of a shift to a “new basic security,” while SPD leader and labor minister Bärbel Bas backed reform but cautioned that any savings hinge on more people returning to work.
• The government acknowledged a roughly €30 billion shortfall in the 2027 federal budget, said tax hikes were not on the table at the meeting, and tasked itself with quickly presenting a comprehensive package without public infighting.
• To speed investment, the coalition plans an Investitionsbeschleunigungsgesetz to rapidly deploy the €500 billion infrastructure special fund for roads and rail by streamlining approvals.
• Reactions were mixed, with Greens warning against a mere rebranding of Bürgergeld and opposition and municipal associations criticizing the lack of a concrete financing plan and arguing other social services drive local costs; Economics Minister Katherina Reiche named a four-economist advisory group led by Veronika Grimm to shape competitiveness reforms.