Unveiling the Challenges Facing Germany’s New Government: Security, Migration, and Economic Reforms

Germany’s New Government Faces a Multitude of Pressing Challenges

Foreign Policy and Security

• The Russian invasion of Ukraine, the US-Russia rapprochement under President Donald Trump, and the impending US withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty have created a heightened sense of insecurity in Europe.
• The Trump administration’s suggestion to relocate Palestinian refugees from Gaza also poses a diplomatic challenge for Germany.

Defense

• The Bundeswehr is facing a significant modernization and recruitment shortage after years of budget cuts.
• A plan for compulsory military service was rejected, leaving the question of how to fill the manpower gap unresolved.
• The funding for the military’s special fund expires in 2027, raising concerns about future defense capabilities.

Migration

• The new government aims to strike a balance between providing humanitarian assistance to asylum seekers and promoting skilled labor migration.
• The efficiency of Germany’s migration system needs to be improved, and the repatriation of refugees to certain countries remains challenging.

Budget and Economy

• The adoption of a federal budget for 2025 is a critical task, as provisional funding has been in place since the end of the Ampel coalition.
• A potential reform of the debt brake, which limits government borrowing, is a contentious issue.
• Germany’s economy has entered a recession, with high energy prices, taxes, and bureaucracy cited as contributing factors.
• The threat of US tariffs on EU imports could further damage exports.

Energy and Climate

• Net fees are a burden for energy-intensive businesses.
• The construction of new gas power plants as backup for renewable energy needs to be promoted.
• The timing of Germany’s coal phase-out depends on the development of gas infrastructure.
• The Greens advocate for accelerated climate action, criticizing the lack of attention given to the issue during the election campaign.

Healthcare and Social Security

• Germany’s aging population requires more extensive healthcare services and nursing facilities.
• The nursing care insurance scheme is facing financial difficulties, with reform proposals ranging from federal subsidies to increased private provision.
• Health insurance premiums have risen significantly, necessitating a review of the system.

Work-Life Balance and Families

• Despite efforts to improve work-life balance, childcare availability remains inadequate, especially for children under three years old.
• This shortage contributes to part-time employment among women, exacerbating labor shortages in various sectors.

Transportation

• The future of the nationwide Deutschlandticket for public transportation is uncertain beyond the year’s end.
• The Union proposes restructuring Deutsche Bahn by separating operations from infrastructure.
• The dilapidated rail network requires significant funding for modernization.

Domestic Security and Law Enforcement

• The Federal Police Act is in need of reform to expand the powers of officers and enhance the protection of critical infrastructure.
• A proposed overhaul failed to pass during the Ampel coalition’s tenure.

Critical Infrastructure Protection

• The Critical Infrastructure Protection Act aims to strengthen the resilience of essential services against threats.
• The EU deadline for its implementation has passed, and the bill has encountered parliamentary opposition.