Coalition reform talks stall as deadline looms: No breakthrough in three-hour summit
The black-red coalition’s reform drive entered its decisive phase on Wednesday as Chancellor Olaf Scholz convened a three-hour summit with union and employer leaders at the Chancellery, yet left without concrete breakthroughs. The meeting, attended by CDU leader Friedrich Merz, Finance Minister Markus Marterbauer and the heads of the DGB and BDA, was described as “constructive and focused” but produced no written agreements. Merz had opened the talks by insisting that “good solutions emerge in dialogue,” while Scholz stressed the need for speed ahead of the cabinet’s July 1 deadline for a 140-billion-euro package covering labour markets, social insurance, taxes and bureaucracy .
The coalition also closed ranks on energy policy, confirming that the six-month fuel-tax cut—popularly known as the Tankrabatt—will expire on 1 July as planned. CDU/CSU and SPD parliamentary groups agreed the measure had served its purpose of cushioning drivers from high oil prices and that further extension would be “financially unsound,” according to CDU deputy faction leader Carsten Linnemann . Average petrol prices have fallen from €1.95 to €1.78 per litre since the rebate began, but industry lobbyists warn pump prices could rebound by up to 15 cents once the subsidy ends .
Behind the scenes, tensions persist over financing. The federal government wants Länder to contribute to a planned cut in non-wage labour costs, but regional leaders, including Vorarlberg’s ÖVP governor Markus Wallner, retorted that “whoever orders pays”—meaning Berlin should foot the bill . Wallner’s stance reflects broader fiscal reluctance among states already struggling with tight budgets.
With the reform clock ticking, coalition negotiators have scheduled further rounds with the Sozialpartner next week. Finance Minister Marterbauer, who joined the Chancellery talks, is expected to present a revised draft on 24 June that pares back some corporate levies in exchange for union concessions on flexible working rules . Whether the package can clear both Bundestag and Bundesrat before the summer recess remains uncertain; the Länder’s resistance to cost-sharing suggests last-minute horse-trading is inevitable.