100 Days of Merz: Election Gifts for the Few Instead of Prosperity for All

Chancellor Friedrich Merz has been in office for 100 days. From the outset, his government has benefitted from significantly better framework conditions than its predecessor. Nevertheless, the first 100 days were marked by broken promises and coalition chaos, most recently over the appointment of a judge to the Federal Constitutional Court. Looking at the priorities in the budget, which features record levels of investment and borrowing, it is clear that the short-term interests of certain individuals have much greater weight than the prosperity, health, and safety of all.

Merz and Finance Minister Lars Klingbeil are breaking their promise to use the monies raised via off-budget “special funds” (Sondervermögen) for additional investments. The draft budget is riddled with tricks that conceal the fact that, in many cases, these funds will be used for a series of expensive “election gifts” that make no contribution to growth or modernisation, such as the Mütterrente (the so-called “mother’s pension”, which provides parents with additional pension credits for time spent outside of the workforce raising children) and VAT relief for the food services sector, instead of for smart investments in schools, railways, and urban redevelopment.

Support for fossil fuels over the energy transition and infrastructure

At the same time, subsidies for fossil energy that further fuel the climate crisis are being maintained: 3.4 billion euros from the Climate and Transformation Fund (Klima- und Transformationsfonds) alone are to be misappropriated to subsidise gas prices. While taking on historically high levels of debt, this special fund will fail to have an impact on people’s everyday lives: bridges, schools, and swimming pools will remain unrenovated, new buses unpurchased, and municipal heating and energy networks unmodernised.

Against unanimous expert opinion from the business and science communities, the universal electricity tax cut promised in the coalition agreement has been shelved. This would not only have provided relief for all private households and businesses at a time of high energy prices but also made an important contribution to eliminating the tax-induced disadvantage experienced by renewable energies compared to fossil fuels.

Economics minister undermining climate targets

While the majority of people have long been struggling with the effects of the climate crisis in their everyday lives, Minister for Economic Affairs and Energy Katherina Reiche is calling climate targets into question. Rather than querying what can no longer be ignored, we urgently need investment in climate adaptation, prevention, and protection. In line with the downplaying of the climate crisis, climate protection through forest restructuring, wet peatlands, and ecosystem restoration is now also to be cut by half in the medium term. This is not how we protect ourselves from the effects of the climate crisis or halt the devastating loss of biodiversity.

Under Reiche’s predecessor Robert Habeck, the energy transition was unleashed, and a renewable energy system seemed within reach. Instead of following the record expansion of renewables with further steps, making targeted investments in new technologies, and providing the economy with planning certainty, the current federal government has opted for a misguided, expensive, climate-damaging, and economically dangerous path. The state-coordinated construction of 20 gigawatts of new gas-fired power plants will push up electricity prices and ensure that the savings generated by cheap renewable energies fail to reach households. Not to mention the fact that we don't even need them. 

What Katherina Reiche sells as “open to technology” is in fact the opposite: a commitment to fossil fuel infrastructure – against all reason. This will lead us straight into a gas-based planned economy.

What Katherina Reiche sells as “open to technology” is in fact the opposite: a commitment to fossil fuel infrastructure – against all reason. This will lead us straight into a gas-based planned economy. Instead, we should be investing in future technologies that are able to secure our prosperity and well-being. But Reiche is even cutting subsidies for private solar installations, depriving people of the last area in which they can make a direct contribution to the energy transition.

Merz and Klingbeil have given assurances that a total of €300 billion from the special fund will be funnelled to additional infrastructure projects. However, instead of €30 billion per year, the draft budget now allocates only an additional €5 billion for road and railway infrastructure projects. Not a single additional rail project is to be implemented. In addition, revenue from the truck toll (LKW-Maut) – which the Greens managed to ensure would also finance rail expansion – will now flow exclusively back into roads. There will be no reductions in mobility costs: the Deutschlandticket, a Germany-wide public transport travelcard, will become more expensive, and historic price increases of well over ten per cent on rail tickets are looming.

Merz is squandering the chance for a sustainable future

The ambitious modernisation of Germany – which failed to find funding under the previous government due to opposition from the CDU and FDP Finance Minister Lindner – was scrapped within the first 100 days of the Merz government. Yet the CDU, CSU, and SPD coalition has more money at its disposal than any previous federal government. Friedrich Merz is thus squandering a unique opportunity to give the country an economically, ecologically, and socially sustainable future. It is high time to correct this false start and save what can still be saved.

Originally translated from German by Katy Nicholson.

President's column

Get involved! There’s no other way to be real – thus the message of Heinrich Böll, and, to this day, his encouragement is inspiring us. With this column the Presidents of the Foundation involve themselves in current social and political debates. This column will appear each month, authored, in turn, by Jan Philipp Albrecht and Imme Scholz.