Germany's Federal Coalition Approves Reform Replacing Bürgergeld with New Basic Security System

Germany's federal government has reached a political consensus to replace the Bürgergeld unemployment benefit system with a new Grundsicherung (basic security) system, introducing stricter sanctions for those who do not participate or abuse the system. The decision followed an intensive overnight meeting among coalition leaders, including Chancellor Friedrich Merz, Finance Minister Lars Klingbeil (SPD), Labor Minister Bärbel Bas, and CSU leader Markus Söder, who announced the results at 9 a.m.

The reform aims to create a system providing greater security and fairness for individuals contributing to it, while significantly cutting benefits for those not fulfilling their obligations. Chancellor Merz emphasized that the reform's goal is to encourage work participation rather than unemployment, stating that benefits will be "significantly reduced in case of non-cooperation." Finance Minister Klingbeil also highlighted the government's responsibility for maintaining economic growth and social cohesion.

SPD parliamentary group leader Matthias Miersch defended his party's support for the new stricter rules, acknowledging some internal questions within the SPD caucus that will be addressed during the parliamentary legislative process. He expressed confidence in a swift legislative process, aiming to finalize the bill by early next year. Miersch described the reform as "approached in a very good form," ensuring that those who participate can continue to "absolutely rely" on the system, while sanctions will apply to those who do not.

This reform is part of broader government negotiations that included financial decisions on infrastructure investments, with the Bundestag approving the distribution of 100 billion euros among German states and relaxing debt rules for federal states such as Saarland and Bremen. Political opinion polls during this period showed the CDU/CSU at 23%, its lowest in three years, with the AfD leading at 25% and the SPD at 15%. The new unemployment benefit reform signals the coalition's approach to social welfare policies, balancing work incentives with stricter measures against benefit misuse.