The recent coalition meeting between the Union and SPD concluded with decisions that have sparked significant criticism regarding the government's economic policy direction.

One of the most controversial outcomes was the decision not to significantly reduce the electricity tax for consumers, a promise made in the coalition agreement.

The federal budget proposal presented by Finance Minister Lars Klingbeil included tax reductions for industries and agriculture but excluded consumers, citing budget constraints.

Initially, the coalition had committed to lowering the electricity tax for consumers to the European minimum level, aiming for a reduction of at least five cents per kilowatt-hour.

Critics, including financial advisor Jens Südekum, have pointed out that the government should address harmful subsidies instead of neglecting consumer relief.

Michaela Engelmeier, chairwoman of the Social Association of Germany, labeled the decision as a 'fatal signal,' emphasizing the need for consumer relief amidst rising living costs.

Economic associations expressed frustration over the coalition's prioritization of pension benefits over necessary tax relief for businesses, highlighting a breach of trust.

The financial implications of the decisions are notable, as both the electricity tax cut and the expansion of the 'Mütterente' involve similar costs, around five billion euros annually.

In contrast, the expansion of the 'Mütterente' program is set to begin earlier than expected on January 1, 2027, with retroactive payments if implementation is delayed.

Economic experts, including Jens Südekum and Veronika Grimm, have criticized the rationale behind prioritizing the earlier expansion of the 'Mütterente' over electricity tax cuts amid a projected budget gap.

North Rhine-Westphalia's Prime Minister, Hendrik Wüst, placed the responsibility for the electricity tax decision on Federal Finance Minister Lars Klingbeil, urging exploration of financial options for tax reduction.

The coalition partners are scheduled to meet again to discuss the electricity tax, which may also address further reductions in energy prices.