Federal Government Plans for Economic Development: Pension Reform and Depreciation Measures
Planned reformation of pensions spearheaded by Merz, aiming to reshape the economic landscape. - Proposed Innovative Plan Unveiled for Social Security Structure
Federal Chancellor Friedrich Merz (CDU) has outlined key strategies for the German economy following a recent coalition committee meeting. A primary focus will be the swift implementation of depreciation options for businesses, effective from this year, and applicable until 2027. These measures aim to create planning security and tackle Germany's structural growth weakness.
In a four-page document, the coalition partners have unveiled over 60 priority measures, placing emphasis on expediting reforms to give evidence of progress by mid-year. Some proposals, such as the reduction of Value-Added Tax for the catering industry, a rise in the commuter allowance, and the reinstatement of full agricultural diesel refunds for farmers, may be introduced as early as January 1, 2026.
The coalition has embarked on an ambitious immediate program with a focus on economic recovery, labor reforms, and addressing pension challenges. Importantly, the government intends to secure the pension level at 48% of average income, work towards encouraging third-pillar (private) pension support via a €10 monthly contribution for children aged 6 to 18, and address concerns over the sustainability of the current pension system.
Merz further emphasized the need to reduce bureaucracy and expedite approval procedures, aiming to foster a more agile and competitive economy. Additionally, the federal government has expressed plans to tackle a comprehensive pension package, including guarantees for various pensions, such as the mother's pension, active pension, and early retirement pension.
The coalition partners have also agreed to establish a commission to advise on potential electoral reform. They will focus on addressing issues such as the reversal of the electoral law, which gained significant attention during the February federal election.
- Friedrich Merz
- CDU
- SPD
- Friedrich Merz (CDU) underscored the importance of a swift pace in implementing depreciation options for businesses in the context of the black-red coalition's economic development plan, emphasizing his intent to fast-track approval processes and foster a strong economy.
- In the realm of politics and general-news, the SPD and CDU have agreed to implement comprehensive pension reforms, with goals such as securing the pension level and encouraging third-pillar support through a €10 monthly contribution for children aged 6 to 18, which will contribute to the overall economic development plan of the federal government.
