Government's domestic financial discussion held in Hartenstein - Financial provisions of the administration in Hartenstein's jurisdiction
The German federal government, led by the CDU and SPD minority coalition, is currently engaged in an internal consultation in Hartenstein, District of Zwickau, to discuss the budget policy for the fiscal years 2027/2028. This consultation follows a cabinet meeting in Dresden and is scheduled for Sunday and Monday.
According to government spokesman Ralph Schreiber, no decisions will be made during the consultation. The focus of the discussion is primarily on economic development, forecasts, and current tax estimates.
The current policy framework emphasizes growth, fairness, and structural reforms for the upcoming fiscal years, including 2027/2028. The government has already adopted budgets for 2025 and 2026 and prepared a multi-year fiscal plan up to 2029.
Key points of the budget policy include:
- Growth and Job Security: The government aims to maintain jobs and foster economic strength through substantial investment in infrastructure, education, affordable housing, and social services to support families and children.
- Investment Offensive: A special fund of 500 billion euros will be used to modernize roads, railways, schools, daycare, hospitals, care facilities, digitalization, and climate protection. These investments are designed to create a foundation for sustained growth and employment.
- Structural Reforms: The government plans to reduce bureaucracy, improve social security sustainably, and enhance the business environment to attract private and foreign investment. This includes an investment booster and a gradual reduction of corporation tax starting in 2028, marking the largest corporate tax reform in over 15 years.
- Fiscal Consolidation: The government intends to implement a strict consolidation package involving cost cuts across all ministries while increasing revenues by closing tax loopholes to ensure responsible use of taxpayers’ money.
- Budget Cuts in Some Areas: Development spending (Official Development Assistance) is subject to cuts—development budget allocations are planned to decrease from 0.56% of GNI in 2025 to 0.52% in 2026 and further to 0.43% by 2029.
- Innovation Support: The government promotes a high-tech agenda to keep Germany competitive in research and technology, investing heavily in innovation centers and key future technologies.
Regarding the 2027/2028 fiscal year specifically, these policies imply continued adherence to fiscal discipline, investment in infrastructure and innovation, and a gradual corporate tax reduction starting from 2028. The coalition's minority status has resulted in political compromises, including budget reductions in some sectors, while emphasizing growth, social fairness, and fiscal responsibility.
It is important to note that no explicit detailed budget figures or policy decisions from the Hartenstein retreat itself were found in the latest available sources. However, the broader federal government budget framework and policy orientations strongly shape the 2027/2028 fiscal outlook.
Finance Minister has urged for the consolidation of the budget, and the consultation in Hartenstein is the next step in the budget process. The consultation is not an Eckwerte-Klausur, as clarified by government spokesman Ralph Schreiber.
- The finance minister has emphasized the consolidation of the budget, aligning with the broader policy focus on fiscal responsibility, which is a key aspect of the community policy and employment policy plans for the fiscal years 2027/2028.
- In the business realm, the German government's 2027/2028 budget policy encompasses structural reforms, including reducing bureaucracy, sustainable improvements in social security, and enhancing the business environment—all of which are significant elements of politics and general-news discussions.
