German coalition clashes over taxes and care
Financial strain puts CDU/CSU and SPD under pressure over care, the sugar tax and the budget.
Germany’s black-red coalition is struggling with a combination of mounting financial pressure and its promise to ease the burden on citizens. Disputes over long-term care insurance and a planned sugar tax are highlighting the tension between spending cuts and tax relief.
The CDU/CSU and SPD coalition faces a difficult autumn. According to Tagesschau, the parties have clashed in recent weeks over, among other things, reform of long-term care and a levy on sugary drinks. The SPD wanted to continue negotiations on care, while the Chancellor’s Office opposed higher burdens on consumers and the food industry.
The sugar tax has not yet been introduced, but it is part of the government’s plans. A response from the German government to the Bundestag (Lower House) says that a levy on sugar-sweetened drinks is to be developed from 2028. The measure is seen both as health policy and as a possible source of revenue for the budget.
According to Tagesschau, a proposal by Finance Minister Lars Klingbeil could raise around €795 million a year. The Chancellor’s Office considers the proposed tax burden too high, according to the broadcaster, and wants the plan to be amended. This brings a financial motive into conflict with fears that companies and consumers will foot the bill.
Long-term care insurance is also increasing the pressure. On 30 September, the cabinet approved a bill for a new structure for social long-term care insurance. Without measures, the government says the deficit would be around €7.6 billion in 2027 and more than €15 billion in 2028. The government wants to keep the general contribution rate at 3.6 per cent for the time being.
There is little room in the budget. Tagesschau reported, based on figures from the German statistics office, that public finances recorded a deficit of €98.8 billion in the first half of the year; the federal share was €72.3 billion. According to the Finance Ministry, the temporary reduction in fuel tax costs the Treasury around €2.5 billion.
The tensions are also affecting confidence in the government. In the new ARD-DeutschlandTrend, only 10 per cent say they are satisfied with the coalition’s performance; the same proportion say this about the federal chancellor. The CDU/CSU stands at 20 per cent in the poll and the SPD at 13 per cent. According to Tagesschau, the 2027 budget is due to be approved on 27 November.
One story, several perspectives
What is established
- The German government wants to reform long-term care insurance.
- A levy on sugar-sweetened drinks is planned for 2028.
- The coalition has limited budgetary room and low approval ratings.
Left
Arguments A left-wing approach would seek to finance care primarily on a solidarity basis and see a sugar levy as a tool for public health and product improvement. In this view, higher burdens on companies and higher earners could be justified to protect public services.
Values Solidarity, prevention, income redistribution, and protecting workers and patients.
Consequences Supporters expect lower healthcare costs in the long term and more stable social insurance; they fear that postponement will make the bill larger later.
Centre
Arguments An institutional approach seeks a workable mix of reforms, temporary financing and limited burdens. The emphasis is on reliable budgets, consultation with the Länder and the gradual introduction of new levies.
Values Administrative continuity, affordability, legal certainty, and public support.
Consequences This could prevent abrupt increases in burdens, but could also mean that structural problems persist for longer.
Right
Arguments A right-wing approach opposes new taxes and warns that companies and consumers are already heavily taxed. It favours lower spending, stricter conditions for social benefits, and more room for families and businesses.
Values Personal responsibility, economic freedom, purchasing power, and budgetary discipline.
Consequences Supporters expect more room for growth and consumption; they fear that higher contributions and taxes will harm the economy and employment.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
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The article’s financial and policy core has been confirmed by German government sources. The political interpretation of the coalition disputes is based on public reporting by Tagesschau and has not been presented as an independently established fact.
- confirmed The German coalition consists of the CDU/CSU and SPD. — The Tagesschau analysis describes the government as black-red and refers to the Union and SPD. source
- confirmed The government is working on a levy on sugar-sweetened drinks from 2028. — The Bundestag cites an official government response on this. source
- confirmed The cabinet approved a bill on long-term care insurance on 30 September. — This is stated on the German government’s website. source
- confirmed Without measures, the long-term care insurance deficit could amount to €7.6 billion in 2027 and more than €15 billion in 2028. — Estimates from the German government’s explanatory memorandum. source
- confirmed The government wants to keep the general contribution rate for social long-term care insurance at 3.6 per cent for the time being. — Mentioned in the government proposal. source
- confirmed The temporary reduction in fuel tax costs around €2.5 billion. — Official explanation from the German Finance Ministry. source
- confirmed Ten per cent are satisfied with the coalition and ten per cent with the federal chancellor. — Result of the Infratest dimap ARD-DeutschlandTrend poll. source
- confirmed The CDU/CSU stands at 20 per cent and the SPD at 13 per cent. — Party preferences from the same ARD-DeutschlandTrend poll. source
Editor's note
The care plans, planned sugar levy and budget figures have been checked against publicly available German government sources and ARD polling. The description of internal coalition disputes is based on Tagesschau and has been phrased as reporting by that broadcaster where necessary.Sources
- Zwischen Sparen und Entlasten: Warum es in der schwarz-roten Koalition knirscht — Tagesschau
- ARD-DeutschlandTREND Oktober 2026 — Infratest dimap
- Pflegeneuordnungsgesetz: Pflege sichern, Angehörige stärken — Bundesregierung
- Bundesregierung nennt Details zu Plänen einer Zuckersteuer — Deutscher Bundestag
- Fragen und Antworten zur befristeten Senkung der Energiesteuer — Bundesfinanzministerium
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