Political Alliance of the Union and the SPD

In a significant gathering, the coalition committee of Union and SPD met to discuss a range of pressing issues, including the future of the automotive industry, steel production, and budget planning for 2027.

Lars Klingbeil, leader of the SPD, emphasized the importance of an open and honest debate during the discussions. The meeting began with a dinner between Klingbeil and CDU leader Friedrich Merz, who reportedly got along well.

Merz, in his remarks, underscored the importance of involving medium-sized companies, often suppliers, in the dialogue about the future of the automotive industry. He also highlighted the challenges faced by the industry, including a sales slump, competition from China, the shift towards e-mobility, and a trade dispute with the USA, particularly the recent 50% tariffs on steel and aluminum imports by US President Donald Trump.

The struggles of both large manufacturers and suppliers have led Merz to initiate an industry-political dialogue on the future of the automotive industry. He has invited leaders from major German automotive companies, including Volkswagen, BMW, and Mercedes, as well as representatives like VDA President Hildegard Müller, to engage in dialogue about the future of the German automotive industry at the IAA Mobility 2025 in Munich. The discussions will focus on maintaining technology openness, supporting the shift to electromobility, and calling for more regulatory flexibility in Berlin and Brussels.

CSU leader Markus Söder stressed that Germany's industry cannot function without cars, and he aims to maintain steel production in Germany for the long term. In response to the recent decline in steel production due to tough competition, high energy prices, and economic weakness, Merz has invited the ailing steel industry to a summit at the Chancellery to discuss long-term steel production in Germany.

The coalition leaders agreed to consider job security as the top priority. In line with this, Labor Minister Barbel Bas (SPD) acknowledged the need for reform of the citizen's income but prioritizes job maintenance and economic growth. Merz also announced key points for a citizen's income reform by the end of the year.

SPD leader Lars Klingbeil stated that there is a budget gap of more than 30 billion euros in the 2027 budget. To avoid public disputes during the federal budget-setting process for 2027, Klingbeil aims to find ways out of the crisis with the German car manufacturers and their suppliers.

The meeting of the coalition committee ended in the evening after about four and a half hours, including an interspersed press conference. The coalition aims to work more constructively together on upcoming reform projects, as pledged by the coalition committee of Union and SPD. Chancellor Friedrich Merz (CDU) has committed to maintaining the functions of the social state and its reform.

In these crucial weeks and months, CSU leader Markus Söder sees the black-red coalition and Germany as a whole facing significant challenges. The coalition leaders remain hopeful and determined to find solutions to the issues at hand and ensure the continued success and growth of Germany's industries.