Politics · Germany · 15 mins ago
German coalition agrees budget compromises but leaves power tax unresolved
Germany’s governing coalition has settled several disputes over the 2027 budget but has not agreed on every major issue.
The coalition of the conservative bloc and the Social Democrats is preparing the federal budget, which still needs final changes before a Bundestag vote expected in late November.
A planned cut to electricity tax for all remains unfunded, with coalition leaders saying they have not found the money to pay for it.
The change would extend a tax reduction already in place for manufacturing, farming and forestry to everyone, and would cost 5.4 billion euros.
The parties also agreed to delay a tax on sugary drinks until 2028, not impose the planned plastic-packaging tax next year, and drop a rise in sparkling-wine tax.
Some proposed cuts to family support have been abandoned, though negotiations on parental allowance and child maintenance payments continue.
The budget committee is due to make its final changes on Thursday, while the coalition is also discussing ways to ease high fuel prices after a temporary fuel discount ends.
Germany’s governing coalition has resolved several disputes over the 2027 federal budget, but a proposed electricity-tax cut for everyone remains unresolved.
Union and SPD leaders say they have not found a way to finance the broad electricity-tax reduction sought by Chancellor Friedrich Merz.
The coalition agreed to delay a planned tax on sugary drinks until January 1, 2028, and not to impose a new tax on plastic packaging next year.
The SPD says planned cuts to some family benefits have been dropped, while negotiations continue over other benefits.
The budget committee is due to hold final consultations before the budget is scheduled for a Bundestag vote at the end of November.
- Who
- Germany’s governing coalition of the Union and SPD, including Chancellor Friedrich Merz.
- What
- The coalition is negotiating the 2027 federal budget, with disputes over taxes, spending and energy-price relief.
- When
- The negotiations were reported on November 10–12, 2026; final budget committee consultations were due on Thursday.
- Where
- Germany, in the Bundestag and its budget committee.
- Why
- The coalition needs to agree on taxes, spending and ways to finance planned relief while closing budget gaps.
Union
SPD
Sugary-drink tax timing
Union
The Union wants the tax to begin in 2028, giving manufacturers more time to change recipes.
SPD
The SPD points to the revenue the tax could bring and the budget need for that money.
Energy-price relief
Union
The Union gives a broad electricity-tax cut top priority, but says funding has not been found.
SPD
The SPD prioritizes a fuel-price cap agreed by the coalition that it says would cost the state no money.
Budget savings
Union
The Union says cuts to federal administration staffing should be more ambitious.
SPD
The SPD highlights dropping planned cuts to some social benefits, especially for families.
A report said the coalition still faced disputes over four budget issues, including electricity, plastic, sugar and alcohol taxes.
The coalition’s budget negotiations entered a decisive phase, with financing for an electricity-tax cut and other measures still open.
Union and SPD parliamentary groups held special meetings to review progress on the budget.
The coalition reported compromises on several issues, while the broad electricity-tax cut remained unresolved.
The budget committee was due to hold final consultations on the 2027 budget.
- Electricity-tax cut
- €5.4 billion needed, according to the reports
- Sugary-drink tax
- Delayed until January 1, 2028
- Plastic-packaging tax
- Not to be imposed next year
- Budget vote
- Scheduled for the end of November
- Cold progression relief
- Estimated to cost federal, state and local governments €4.2 billion
6 sources
Koalition findet Kompromisse für Etat – Stromsteuer ungelöst
Finanzen: Koalition findet Kompromisse für Etat – Stromsteuer ungelöst
Bundeshaushalt: Ringen um Haushalt – Sondersitzungen der Koalitionsfraktionen
Strom, Plastik, Zucker, Alkohol: Wegen dieser vier Punkte wackelt der Paradox-Haushalt
What people are saying
It has not yet been possible to find corresponding financing for this in the budget.
The reduction of the electricity tax has top priority.
But the core remains intact.
their recipes to be changed