CDU is launching an ambitious ‘Agenda 2030’ aimed at stimulating Germany’s economy with tax cuts and reforms. Under Friedrich Merz’s leadership, the plan proposes significant tax relief for citizens and businesses, a stricter asylum policy, and reduced energy costs. Key proposals include lowering income tax burdens and exempting overtime pay from taxes. The CDU also plans to streamline construction approvals and promote affordable housing while ensuring fiscal responsibility without raising taxes. The election program is set for formal adoption soon.
CDU’s Ambitious ‘Agenda 2030’ for Economic Growth
The Christian Democratic Union (CDU) is gearing up for the federal election campaign with an ambitious ‘Agenda 2030’. This initiative promises significant tax relief for both businesses and citizens, with an objective of achieving a medium-term economic growth rate of two percent annually.
In its endeavor to rejuvenate Germany’s economy, the CDU, under the leadership of chancellor candidate Friedrich Merz, is proposing substantial reforms. The party’s draft resolution, set to be approved during the CDU federal executive board’s retreat in Hamburg, outlines plans for a major tax overhaul, more adaptable labor market policies, and reduced energy costs.
Key Features of the CDU’s Economic Strategy
The CDU’s strategy includes a commitment to abolish the citizen’s income, introduce tax cuts, and implement a stricter asylum policy. The ‘Agenda 2030’ specifically details a four-step tax reform process aimed at alleviating the financial burden on employees starting in early 2026. Key proposals include lowering the income tax burden, applying the top tax rate only to earnings exceeding 80,000 euros, and increasing the basic tax allowance each year. Importantly, overtime pay for full-time workers would be exempt from taxes.
For retirees who choose to work, earnings up to 2,000 euros monthly would remain tax-free. Additionally, the CDU plans to eliminate the solidarity surcharge and reduce corporate taxes, as outlined in a twelve-page document intended for discussion at the retreat.
During his appearance at the CSU winter retreat, Merz reiterated the importance of these tax relief measures, which are projected to unfold over four years, concluding in 2029. The CDU envisions reducing the burden of social contributions to around 40 percent.
On financing these initiatives, the CDU does not anticipate raising taxes but suggests that significant funds could be released in the federal budget through a stricter migration policy and a transition from the current citizen’s income to a new basic security system. This new system would impose stricter penalties for those unwilling to accept work opportunities, thereby nullifying their claims to benefits.
The formal adoption of the election program is scheduled for Tuesday, with presentations by Merz and Söder to follow.
In terms of energy costs, the CDU aims to reduce electricity prices by at least five cents per kilowatt-hour by lowering electricity taxes and network fees. To bolster the automotive sector, the party also seeks to lift the ban on combustion engines.
Furthermore, the CDU is focused on igniting a construction boom across Germany. The draft resolution states, “We want to see more construction cranes in our country in just a few months.” To achieve this, the party plans to streamline approval processes for transport, construction, digital infrastructure, and industrial projects, alongside implementing special depreciation measures to promote affordable housing.
On the topic of fiscal policy, Schleswig-Holstein’s Prime Minister has called for reforms to the debt brake, emphasizing a ‘triple approach’ that balances adherence to constitutional limits, tax relief, and necessary investments. All expenditures will be meticulously reviewed, particularly those rising sharply during the tenure of the current coalition.
At its upcoming party convention on February 3, the CDU intends to adopt an immediate action plan with measures ready for execution if they assume government responsibilities. “The challenges are so great that we cannot afford to lose time. It counts from the very first day,” the draft asserts, highlighting the urgency of their proposed initiatives.
Stay tuned for in-depth analyses and updates on the early federal election scheduled for February 2025.