Overview
- The coalition plan would cut VAT on restaurant meals to 7%, raise the commuter allowance to €0.38 per kilometer from the first kilometer, and lift the honorary allowance to €960 starting January 1, 2026.
- The Bundesrat warns of sizable revenue shortfalls—about €11.2 billion for states and €1.4 billion for municipalities in 2026–2030—and has requested compensation from Berlin.
- Without a deal, the package could fail in the Bundesrat vote scheduled for December 20, following an initial vote in the Bundestag, jeopardizing the planned start date.
- Lars Klingbeil has ruled out federal compensation and urged states to back the agreement, warning that refusal would imperil relief for hospitality, commuters, and volunteers.
- Reactions diverge: Jens Spahn criticizes Klingbeil’s public pressure, Rheinland‑Palatinate’s Alexander Schweitzer argues the Bund should pay, Bavaria’s Albert Füracker backs the relief, DEHOGA urges the VAT cut, and DIW’s Marcel Fratzscher calls the measures clientelism and says the Bund should fund them if enacted.