Overview
- The federal government has pledged a broad reform package on taxation, pensions and health to be presented before the summer recess but faces a substantial shortfall in revenue that threatens the plan.
- DIW president Marcel Fratzscher argues that tax reform must come first and that financing will require a mix of spending cuts, removal of subsidies and privileges, and higher taxes on the very wealthy.
- SPD negotiators and trade unions met with Chancellor Friedrich Merz and won promises of further talks and limited concessions, but no binding counter‑financing deal has been reached.
- Commentators warn visible cuts to care, health and pensions could hit average and low earners, spark protests and boost support for radical parties such as the AfD in autumn state elections.
- Coverage divides by outlook: tagesschau focuses on Fratzscher’s technical budgeting fix, der Freitag highlights the social risks of cuts, and FOCUS warns political fallout and electoral danger for the governing coalition.