Germany's coalition government of CDU/CSU and SPD has been deadlocked over income tax reform and relief measures, with disagreements over financing and SPD resistance to reforms. Chancellor Friedrich Merz visited the SPD parliamentary group in an effort to ease tensions, describing the meeting as friendly. However, lingering skepticism remains among SPD members about Merz's reform pace and communication style. Both sides are working on a major reform package covering pensions, taxes, and bureaucracy, with a goal to finalize by June 30. Merz warned against excessive debt, citing risks to European stability, and urged coalition partners to avoid setting public 'red lines'. Today, CDU and CSU politicians have voiced significant objections to Finance Minister Lars Klingbeil's draft tax reform, calling for revisions. Critics argue the planned tax relief of €10 billion is insufficient and that cuts to tax benefits for clubs and associations are misguided. The draft includes raising the basic tax allowance to €12,900 by 2028, adjusting the top tax rate threshold, increasing child benefits, and introducing a new 'super-rich' tax rate of 47% for incomes above €280,000, alongside reducing deductions for craft services from 20% to 15%.

A German government response to a parliamentary question from The Left party reveals that 53% of women and 23% of men who have contributed to the pension system for 45 years receive pensions below the poverty risk threshold of €1,446 per month. The disparity is especially pronounced in eastern Germany, where up to 41% of men fall below the threshold. The Left party criticizes proposals to abolish the deduction-free pension after 45 years, arguing they would hit those already struggling with low pensions.

Germany's criminal justice system is severely overloaded, with around one million pending criminal proceedings. Delays are forcing the release of suspects from pre-trial detention due to exceeded legal limits. Causes include staff shortages, outdated technology, and complex investigations. The government plans to address this with more personnel and digitalization, while experts discuss faster procedures like video hearings.

Several German states, including North Rhine-Westphalia, Rhineland-Palatinate, Saarland, and Lower Saxony, have temporarily lifted the Sunday and holiday driving ban for trucks to maintain supply chains threatened by extreme low water levels in rivers. The federal government, led by Transport Minister Steffen Bilger (CDU), announced additional measures such as reducing construction disruptions and increasing rail capacity. The move has drawn mixed reactions: industry association BDI welcomed it as a pragmatic response, while environmental group BUND and opposition parties (Left, Greens) criticized it as a short-term fix that burdens people and climate, calling for stronger support for inland shipping and rail infrastructure instead.

The state government of Baden-Württemberg is intensifying its technology policy, focusing on green technology as a growth sector to counter fears of industrial decline. The sector's gross value added rose from €11 billion in 2010 to €27 billion in 2025, employing about 200,000 people. The government also launched a network of 99 'post-fossil research projects' and highlighted strengths in robotics, space, defense, AI, and medical technology. Up to 40,000 auto industry jobs could be lost by 2030 due to weak Chinese demand.

Background: The Netherlands has been pushing for renewed EU discussions on using frozen Russian assets to support Ukraine, facing opposition from Belgium and the European Central Bank. Today, a new proposal by former German, French, and US officials—Annegret Kramp-Karrenbauer, Nathalie Loiseau, and Daleep Singh—calls for transferring custody of €210 billion in frozen Russian central bank assets from Belgium's Euroclear to a new EU administrator. This would shield Belgium from Russian threats and enable the EU to use the funds as a loan to Ukraine, strengthening Kyiv's position in peace talks. The proposal comes as Ukraine's current €90 billion EU loan is set to expire next year, and ahead of potential political shifts in France and the US. The trio argues that the transfer would remove pressure on Belgium, provide a precedent (citing the 2003 transfer of Iraqi assets), and prevent the funds from being accessed by Putin or Trump. They also warn that without action, Ukraine could face a funding gap, and that the window of opportunity may close after upcoming elections.