The proposed measures are expected to result in significant tax losses, with states and municipalities anticipated to absorb approximately two-thirds of over 30 billion euros in losses over the next five years.

Niedersachsen's Minister President, Olaf Lies, noted a unified approach among state leaders to address the financial implications for local governments.

State leaders are pushing for an agreement on the economic package before the parliamentary summer recess in July, with a key meeting scheduled with Chancellor Friedrich Merz.

The Bundestag is set to vote on the draft legislation on June 26, 2025, after which it will require final approval from the Bundesrat.

Schwesig emphasized the importance of lowering energy prices to facilitate broader economic growth, despite a modest growth rate of 1.3% in her state last year.

Additional measures proposed by the state government, such as reducing the gastronomy tax and increasing commuter allowances, are seen as beneficial for economic stimulation.

The Bundesrat's discussions underscored the critical role of tax relief in boosting investment and addressing the economic stagnation in Germany.

Mecklenburg-Vorpommern's Minister President, Manuela Schwesig, expressed support for the tax relief plans but emphasized the need for compensation due to anticipated tax revenue losses.

Schwesig highlighted that Mecklenburg-Vorpommern could face a shortfall of around 140 million euros, necessitating federal financial compensation.

On June 13, 2025, the Bundesrat convened to discuss a proposed economic package aimed at stimulating investment and revitalizing Germany's stagnant economy.

The government's initiative focuses on tax reductions for companies to encourage investment and economic growth.

Key components of the economic package include improved depreciation options for businesses, a reduction in the gastronomy tax, and increased commuter allowances.