(April 29): Chancellor Friedrich Merz’s cabinet approved a healthcare overhaul and a multi-year budget blueprint, laying the groundwork for a push to revive Germany’s economic growth.
The packages were cleared on Wednesday, the chancellery said. The draft legislation will now be debated and negotiated in the lower house of parliament, or Bundestag, before they’re finalised.
The ruling coalition has pledged to take on a sweeping reform agenda but has struggled to gain traction among voters as divisions persist between the Merz’s conservative Christian Democratic-led bloc and the centre-left Social Democrats. Germany’s tax and pension system will be targeted in addition to public health, the government has said.
The Health Ministry this month presented a plan to eliminate a spending deficit that’s on course to rise to €40 billion by the end of the decade with policy actions such as reining in payments, drug prices and coverage for dependants. But the measures face resistance from within the coalition over plans to restrict dependents from healthcare plans and other service cuts.
The budget framework is longer-term but sets out spending cuts across ministries and new sources of revenue, such as a levy on sugar products. Finance Minister Lars Klingbeil will aim to close next year’s fiscal gap and halve the projected 2028 shortfall to about €30 billion.
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