Cutting expenses in social services within the Southern region
In the heart of Berlin, the coalition committee is set to convene on Wednesday, with the focus on further reductions in energy prices and discussions surrounding social spending, economic relief, and the implementation of the mothers' pension.
The German coalition government, comprising the Union (CDU/CSU) and SPD, has proposed significant measures aimed at boosting social welfare and economic relief. The 2025 federal budget allocates 190 billion euros to the social security and pension system, marking an 8% increase compared to 2024. This increased funding will support affordable and environmentally friendly housing, with 20 billion euros earmarked for housing construction until 2028, including a record 3.5 billion euros for social housing.
However, a contentious point of debate within the coalition has been the electricity tax cut. Initially, Finance Minister Lars Klingbeil (SPD) scrapped the household electricity tax cut, citing budgetary constraints despite proposing record new debt. This decision, particularly criticised by the CDU, has been met with public outcry, leading to ongoing negotiations to provide broader economic relief, including to households and small businesses.
The coalition's decision not to reduce electricity tax as agreed in the coalition agreement has attracted broad criticism. Markus Söder, CSU leader, has called for "complete relief" for SMEs and crafts, in addition to the reduction of electricity tax. Söder also demands more speed for the payment of the extended mothers' pension, which is scheduled to begin in 2028.
The pension insurance needs two years for the technical implementation of the extended mothers' pension, which Söder believes is too late. He insists on a swift payment of the extended mothers' pension, making it a central question of social justice.
During the coalition committee meeting, the controversial decision on electricity tax, potential savings in the social sector, and the acceleration of the mothers' pension implementation will be discussed. Söder has identified potential savings in the area of citizen's allowance and other comparable expenses.
It is essential that all businesses, not just large companies, benefit from the reduction in energy costs, according to Söder. The discussion will focus on which expenses can be reduced to create room for further relief, as the coalition strives to balance budgetary constraints with the need for economic relief and social welfare.
In the context of the coalition committee meeting, discussions about the electricity tax cut and its potential impact on small businesses are expected, given Markus Söder's call for complete relief for SMEs. Additionally, the acceleration of the implementation of the extended mothers' pension and potential savings in the social sector, including citizen's allowance, are also on the agenda, as identified by Söder.
