(de-news.net) – The Federal Government coalition has agreed on a number of reforms at their summit in Berlin, including major adjustments to the welfare system. The goal is to change the current paradigm into a new type of fundamental security, according to government sources. The first missed appointment at an employment center will result in a 30% reduction in benefits, double the prior penalty. A third crime would result in the suspension of all benefits, including housing support, and a second offense would result in a further 30-percent reduction. In addition to immediate reductions for unemployed people who do not apply for authorized jobs, unwarranted rejections may result in the complete withdrawal of benefits. The Federal Constitutional Court, however, requires that these severe penalties be time-limited and linked to particular employment offers.
In addition to the welfare reforms, the coalition reached an agreement to introduce the so-called activation pension, which is scheduled to take effect on January 1, 2026. This new pension model will apply exclusively to individuals engaged in non-self-employed work beyond the statutory retirement age. As part of the initiative, a supplementary tax exemption of 2,000 euros will be granted to eligible recipients. Furthermore, the coalition announced its intention to establish a dedicated retirement commission within the current calendar year. This body will be tasked with evaluating long-term pension sustainability and is expected to deliver its findings and recommendations by the conclusion of the following year.
The Bundestag also approved a legislative proposal aimed at accelerating residential construction in order to address the growing demand for affordable housing. The bill seeks to streamline planning and approval processes, thereby enabling municipalities to authorize construction projects even in areas lacking finalized zoning plans. Under the new provisions, residential buildings may be erected on unconventional sites, including secondary plots and the rooftops of commercial establishments such as supermarkets. Additionally, the legislation permits deviations from existing noise protection standards in justified cases. Building Minister Verena Ute Hubertz (SPD) emphasized that the reform is designed to reduce procedural delays and financial burdens, with its regulatory framework set to remain in effect until the end of 2030.
The coalition further confirmed its commitment to securing financial resources for ongoing transportation infrastructure projects. Chancellor Friedrich Merz stated that all available funding mechanisms would be utilized to ensure the successful completion of these initiatives. As part of the agreement, Transport Minister Patrick Schnieder (CDU) is expected to receive an additional 3 billion euros in budgetary allocations specifically earmarked for the development of new roadways. Although this amount falls significantly short of Schnieder’s original request of 15 billion euros, the coalition plans to reassess the sufficiency of the allocated funds after a two-year period, allowing for adjustments based on project progress and fiscal requirements.
With regard to the proposed phase-out of combustion engine vehicles, the coalition was unable to reach a definitive agreement. Nevertheless, a targeted subsidy program was approved to promote the adoption of electric and zero-emission vehicles. This initiative, backed by a financial envelope of 3 billion euros, is intended to support individuals and households with low to moderate income levels in transitioning to environmentally sustainable transportation options.
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