BERLIN (dpa-AFX) – Chancellor Friedrich Merz has survived the pension drama. But he can’t look forward to a peaceful Christmas yet. Because he still has a lot to sort out in the next two weeks.
And the question is: Can a tug-of-war like that with pensions be repeated for another reason? It is “to a certain extent a process that we will have to face even more often in this legislative period,” says the regional group leader of the CSU members of the Bundestag, Alexander Hoffmann, on Deutschlandfunk. “It will be the case throughout the legislative period that we will have issues where a majority, which currently consists of twelve representatives, threatens to melt away.” But: “This is a normal process in such a tight coalition.”
An overview of the topics that are still pending until Christmas:
Health insurance contributions
Merz has promised that health insurance contributions for millions of insured people will not rise again on January 1, 2026. An austerity law with spending curbs, especially at clinics, is supposed to reduce the pressure for this, but it is stuck. The Bundesrat sent the law passed by the Bundestag to the mediation committee – but the time for compromises is short. Health Minister Nina Warken (CDU) has already warned that the delays may lead to higher additional contributions next year. In any case, health insurance representatives are warning about increases in 2026, even with the austerity law, as many health insurance companies have to replenish their reserves to minimum values.
Heating law
It is not a reform that is very urgent – but the coalition is coming under increasing pressure with the heating law inherited from the traffic light government, because industry associations want planning security and warn of uncertainties for consumers. The heating law will be on the agenda again at the coalition committee on Wednesday. A fundamental change of course was announced in the coalition agreement – but how hard should the cut be? There seem to be differences in the federal government, especially with regard to the central requirement that new heating systems may only be installed if they are powered by at least 65 percent renewable energy, as well as the transition periods for gas heating systems.
Savings package for 2027
Not until Christmas, but “around the turn of the year” Merz, SPD leader and Finance Minister Lars Klingbeil and CSU leader Markus Söder want to present a solution to the billion-dollar gap in the budget plans. Although the hole for 2027 has now shrunk to less than 20 billion, the figure for the following years is enormous. What is needed is an austerity package; support programs and subsidies may be canceled and taxes increased. That sounds like night meetings and heated arguments – so results will probably not be available until February/March at the earliest.
Pension and no end
Even after the adoption of their pension package in the Bundestag, the Union and the SPD face delicate debates on pensions with the potential to explode. First of all, it should be clarified before Christmas who exactly sits on the pension commission that is supposed to hatch proposals for a major reform of old-age security. There is already a source of conflict in the occupation, as the coalition parties that are prone to disputes are supposed to be represented there – probably including the Union youth, who can no longer hide their frustration with the responsible Labor Minister Bärbel Bas (SPD). Bas at least assumes that they will be represented on the commission, as she said on ARD. The commission could be set up at the cabinet meeting on December 17th.
“All topics would then be on the table,” said Bas. “It’s about the retirement age. It’s about broadening – who should pay in. It’s about income. And in this respect we don’t want to impose any prohibitions on thinking.” However, the consideration that is already being discussed about charging pension contributions on capital gains is likely to meet with resistance in the Union.
Citizen’s money
There is currently a lot of discussion going on behind the scenes about another legislative proposal that has been announced as a major reform: the reform or – according to the Union – the abolition of citizens’ money. The planned new basic security is intended, among other things, to force those receiving state benefits to act, to work and to follow the rules through stricter sanctions. There are still two regular meetings of the federal cabinet at which Bas’s reform draft could be put through the parliamentary process before Christmas. That is planned. It doesn’t seem certain that it will work this year.
Frozen Russian assets
There are also major construction sites for the Chancellor in foreign policy. On December 18th he wants to EU summit reach an agreement in Brussels on the use of Russian assets frozen in the EU to support Ukraine. Belgium, where a large part of the assets of around 185 billion euros are managed by the Brussels financial institution Euroclear, is resisting the plans because of financial risks. A meeting between the Chancellor and Belgian Prime Minister Bart De Wever and EU Commission President Ursula von der Leyen on Friday evening did not result in a breakthrough.
Europe’s largest armaments project
A decision is also expected to be made this year on Europe’s largest arms project, which is known by four letters: FCAS. They stand for “Future Combat Air System”. The air combat system should be operational from 2040 and will replace the Eurofighter fighter jet. It is primarily a project by Germany and France, but Spain is also involved. But there has been massive trouble for months, especially because the French company Dassault is demanding a stronger role than its partners can tolerate. A failure would not only massively damage Franco-German relations, but also the idea of pulling together more closely in the defense of the European NATO area./mfi/tam/bw/sam/hoe/DP/mis