The German government, made up of a coalition of the Christian Democratic Union (CDU), the Christian Social Union (CSU) and the Social Democratic Party of Germany (SPD), will have to deal with thorny issues in 2026.
After exhaustive debates, the alliance managed to get its pension reform package approved in the Bundestag in early December. This guarantees that the level of the replacement rate will remain stable at around 48 percent until 2031, while a commission will analyze far-reaching reforms of the system and present them in mid-2026.
In any case, the financial security of those retiring will continue to be a key concern in a society where people are living longer and the number of older people continues to increase.
In the 2026 budget, the state subsidy to compensate for pension losses amounts to 128 billion euros, around 25 percent of the entire spending plan. The Pension Commission is now under pressure to develop viable proposals on an extremely complex issue.
What is really at stake is raising the retirement age. However, some, such as economics professor Jens Südekum, suggest eliminating this requirement. The scientist reiterates that the total pension a person receives should depend solely on the years they have worked and paid into the system.
New form of military service
At the beginning of 2026, young Germans aged 18 and over will receive a letter from the government. Men must fill out the form attached to this email, while women can do so voluntarily.
The questions focus on personal data, educational qualifications and other skills as well as willingness to do military service. Currently, according to the military service reform, which was also passed in December, only participation in a medical examination is mandatory in order to assess the young man’s health and general physical condition.
The government hopes to find enough volunteers to increase the number of soldiers in the Bundeswehr from the current around 184,000 to 255,000 to 270,000 over the next decade and to increase the number of reservists to 200,000.
If this cannot be achieved through voluntary recruits, compulsory military service, which has been dormant since 2011, will be reintroduced.
The far right is preparing for victory
The partly right-wing extremist party Alternative for Germany (AfD) is already the strongest opposition conglomerate in the Bundestag. With several regional elections coming up in 2026, the party is expected to achieve very good results this year. In the eastern federal states of Saxony-Anhalt and Mecklenburg-Western Pomerania, the AfD currently receives 40 percent of responses in surveys.
Will the centrist democratic parties be able to defeat the far right? And if the AfD becomes the leading party by a large margin in both federal states, will the CDU’s promise never to work with the Alternative for Germany remain?
Elections in both federal states will not take place until September, but until then debates about how to deal with the AfD will dominate. An exciting election year begins in March with the state elections in the western German states of Baden-Württemberg and Rhineland-Palatinate.
Immigration and border controls
The issue of migration will also occupy a prominent place on the political agenda in 2026. Since the current federal government took office in May 2025, Interior Minister Alexander Dobrindt (CSU) has made it clear that Germany will pursue a tough policy towards irregular immigrants.
In mid-December, EU interior ministers agreed to significantly tighten the common asylum policy, including the reintroduction of so-called “return centers” in countries outside the European Union, although previous attempts, such as the Italian government’s in Albania, were unsuccessful.
With the common asylum policy, “we will be able to shift controls to Europe’s external borders,” said Chancellor Friedrich Merz at the beginning of December. Whether this will actually be the case remains to be seen.
Climate policy challenges
The EU recently presented its latest climate goals: Greenhouse gas emissions are to be reduced by 90 percent by 2040 compared to 1990, as the European Union wants to be climate neutral by 2050.
Federal Environment Minister Carsten Schneider (SPD) was pleased. “The new EU climate target is probably the most important climate policy decision of this legislative period,” he said on December 10th.
In March, Schneider wants to present a new climate protection plan and explain how Germany can help achieve this goal. However, Economics Minister Katherina Reiche (CDU) shows little interest in expanding wind and solar power plants and instead relies on gas power plants.
(dzc/lgc)
About The Author
