A coalition agreement in Baden-Ẅrttemberg between the Green Party and the CDU has been reached after the state election, with Cem Özdemir and Manuel Hagel announcing the deal in Stuttgart.

Top-party talks over the coalition contents will continue this weekend, and the finalized agreement is set to be presented to the public next week.

Özdemir is anticipated to be elected Minister-President in the state parliament on May 13.

SPD General Secretary Tim Klüssendorf opposes scrapping the solidarity surcharge and instead backs a higher wealth tax and other compensatory measures.

Merz signals no further plan to shorten illness-related leave days while leaving room for discussion on better instruments.

The budget proposal envisions nearly 200 billion euros in new net borrowing.

Framework provisions include a free last year of kindergarten (up to 250 million euros) and a climate investment fund for municipalities; the kindergarten year could start as early as the 2027/2028 school year.

Özdemir pledges bureaucratic streamlining and the implementation of an efficiency law, aiming to sunset unnecessary state reporting and documentation duties by end-2027 absent climate or nature protection risks.

The coalition agrees to cap rent-related costs under a new heating law framework and reform the Building Energy Act, with a goal to phase out or adjust the 65 percent rule.

SPD proposes pausing a Diet increase and suspending a 497 euro monthly adjustment, arguing to preserve the current mechanism amid coalition talks.

Merz pushes for swift implementation of the health savings package and reiterates openness to raising the wealth tax within the coalition negotiations.

Initial coalition talks highlighted 48 concrete points in the exploratory paper, including a mandatory free kindergarten year, climate targets adherence, relief on real estate transfer tax for families, and easier company formation.