Reform debate in the black-red coalition

The German government asserts it almost every day: Germany needs reforms. Black-Red has a lot planned for this autumn - and is in danger of getting lost in discussions. What's on the to-do list. By Jan Frédéric Willems The black-red coalition is in the middle of the debate about its planned reforms.

On Wednesday, for example, Federal Health Minister Carsten Linnemann (CDU) wants to bring a draft law on nursing reform into the cabinet. Just one of many construction sites. The care system in Germany is under immense pressure. An increasingly older population in need of care is facing fewer and fewer young people who pay into long-term care insurance.

Statutory funds expect a deficit of 4.4 billion euros this year - and even 7.5 billion euros in 2027. Health Minister under time pressure: The nursing reform In order to avert the financial collapse, the new Federal Health Minister Linnemann wants to introduce a law to stabilize the care finances. According to his idea, for example, Pflegeade should be awarded according to stricter criteria in the future. In addition, the surcharges for home costs are to be paid later than before.

According to Linnemann's ideas, a fundamental structural reform for the care system should only come later. This is to be developed by a commission of experts. The SPD does not want to participate in the sequence - first shortening, then reforming. She is already calling for a mechanism that covers care costs above a certain amount.

And the Social Democrats insist that private long-term care insurance companies also contribute to the cost of statutory insurance. Despite the disagreement: SPD health politician Christos Pantazis assumes in the joint morning magazine of ARD and ZDF that the Union and the Social Democrats will agree in time: "We are already arguing in the form of a compromise," Pantazis said. The black-red ongoing controversy: The pension reform The reform of the pension - and the discussion about it - has accompanied the government since day one. Already a year ago, a first pension package almost failed in the Bundestag.

Spicy: At the time, it was not a dispute between the Union and the SPD, but between the Union leadership and young Union members, the so-called pension rebels, who almost brought the vote in the Bundestag to a halt in the last few meters. Since then, a lot has happened: the government set up an independent pension commission, which was able to agree on 33 proposals for a fundamental pension reform. According to Federal Labour Minister Bärbel Bas (SPD), "a total work of art" - which, as Friedrich Merz wished, must also be adopted in its entirety. But in the package, one point in particular provides for discussions: the abolition of the deduction-free pension after 45 contribution years - colloquially: "pension at 63".

Headwinds from prime ministers For many in the Union, it is above all an expensive gift for well-earning professionals who have not worked hard physically - and whose workforce is being lost to the economy. At the latest since the recent state elections, however, it is clear that many voters find it disrespectful to abolish the pension at 63. Several Prime Ministers, including Saxony's Prime Minister Michael Kretschmer from the CDU and Mecklenburg-Vorpommern's SPD Prime Minister Manuela Schwesig, therefore want to delete this proposal from the pension package. A solution to the dispute is not yet in sight.

But at least: Other ideas about pensions are relatively undisputed. For example, there should be a capital annuity for everyone, which should be invested in the stock market, for example, and thus generate returns. In addition, the early retirement pension has already been introduced into the Bundestag: the state pays ten euros per month into the pension scheme for all children between the ages of six and 18. Relief for everyone?

The tax reform of Finance Minister Lars Klingbeil (SPD) wants to relieve households with low and middle incomes by several hundred euros per year. For this purpose, the basic allowance, the employee lump sum and the child allowance are to be increased, among other things. On the revenue side, Klingbeil plans, among other things, to expand the wealth tax, increase the tobacco tax and introduce a sugar tax. The federal government has already launched the draft law for this, but resistance is now stirring in the Bundestag.

Union politicians criticise both sides of the reform. On the one hand, they think the relief is too low. On the other hand, they are against new taxes and tax increases, if only to plug household gaps. Another major contentious issue: the cabinet draft does not envisage compensating for the cold progression.

This is the situation that some people have less money than before after a salary increase - because he or she has to pay more taxes than before due to the progressive tax rate. In the past, this effect was regularly offset by finance ministers. The fact that this is not the case this time cannot be understood by the fiscal spokesman of the Union Group, Fritz Güntzler. He requests a course correction and announces that "everything will be put to the test again".

For this reason, it is expected that amendments to the package will still be negotiated in the Bundestag and Bundesrat. And otherwise? The side scenes The coalition leaders also have some tough discussions on side scenes: Federal Family Minister Karin Prien (CDU), for example, has announced that she wants to reduce parental allowances. Part of the pension compromise was also to abolish mini-jobs in their current form and make them subject to contributions.

And from the house of the Federal Minister of Housing Verena Hubertz (SPD) comes the push to reduce the housing allowance. In the discussions on all these reforms, it is striking that the lines of conflict are not only between the Union and the SPD - but also between the CDU and the CSU or between the federal government and the federal states. And: The agreement on a reform is often used as a bargaining chip for the discussion on the next reform. In this respect, the individual reforms can hardly be separated from each other.

The overall picture will be decisive in the end.