Policy Updates

On April 9, 2025, the CDU/ CSU and SPD parties in Germany finalized their coalition treaty, where Chancellor-designate Friedrich Merz, Bavarian Minister-President Markus Söder, and SPD Co-Chairs Lars Klingbeil and Saskia Esken presented an agreement that focuses on Germany’s global leadership, economic modernization, and migration control.

Key highlights include:

• BMZ remaining independent: The BMZ will retain its independent status, with Minister Svenja Schulze expected to continue her leadership. This decision reflects advocacy efforts from various stakeholders and ensures BMZ’s role in Germany’s development policy;
• ODA target revised: For the first time in 30 years, the 0.7% ODA/ GNI target has been excluded from the coalition treaty. Instead, the treaty calls for reducing the ODA quota to consolidate the federal budget. Germany’s ODA contribution was 0.82% of GNI in 2023 but saw a EUR940 million (US$1 billion) cut to BMZ ’s budget in 2024. Voluntary contributions to international organizations are also set to decrease;
• A new development policy approach: The treaty outlines a shift toward aligning development policy with Germany’s geopolitical and economic interests. It calls for consolidating development-related responsibilities under BMZ leadership, potentially including initiatives like the International Climate Initiative, currently housed in the BMWK;
• Strengthened inter-ministerial cooperation: The treaty emphasises better coordination across BMZ, the AA, and the BMVg to improve policy coherence and align development efforts with strategic objectives;
• Commitment to sovereign debt and tax systems: The treaty reaffirms support for resolving sovereign debt crises and strengthening tax systems in developing countries, aligning technical and financial cooperation with European development policy; and
• The climate sections remaining unchanged: The climate sections remain consistent with earlier drafts, with a focus on domestic action over international initiatives.

This coalition treaty signals a strategic pivot in Germany’s development policy, prioritizing geopolitical alignment and fiscal consolidation.

On April 7, 2025, Germany adopted the Amman-Berlin Declaration which aims to ensure that at least 15% of development projects globally promote inclusion at the Global Development Summit.

The summit convened 4,500 participants from 100 countries, including persons with disabilities, government representatives, and international organizations. Over two days, attendees engaged in more than 60 sessions focused on advancing the UN Convention on the Rights of Persons with Disabilities.

In addition, over 800 pledges were made by participating governments and organizations to enhance accessibility and inclusion. The declaration marks a historic step toward measurable goals for integrating disability rights into international development.

On April 6, 2025, Germany pledged EUR2 million (US$2 million) to the WHO following the US withdrawal of funding.

This contribution is in addition to Germany's US$317 milllion contribution for 2024-2025 which aims to strengthen global health systems, improve pandemic preparedness, and ensure continued access to essential healthcare services in vulnerable regions. Germany’s leadership in global health funding highlights its commitment to multilateral cooperation.

On March 18, 2025, the Bundesrat approved changes to the constitutionally enshrined debt brake, which allowed for a vote on March 21, 2025, approving an amendment outlining increased defense spending, a EUR500 billion (US$541.1 billion) infrastructure investment package, and the launch of a historic overhaul to boost defense and infrastructure investments.

The amendment was passed by the outgoing parliament with a two-thirds majority, circumventing the debt brake, which capped annual borrowing at 0.35% of GDP. This decision represents a political deviation from likely chancellor Friedrich Merz, who previously supported maintaining the debt brake.

The agreement comprises three pillars: defense spending capped at 1% of GDP, with additional financing through debt; a EUR500 billion (US$541.1 billion) special fund over 12 years for infrastructure, climate protection, and economic transformation; and increased borrowing leeway for federal states. Initiated by the Greens, the definition of defense spending now includes civil and disaster protection, intelligence, aid to countries attacked in violation of international law, and information security. The package includes EUR3 billion (US$3.2 billion) in military assistance for Ukraine, easing future constraints on support.

The increased fiscal leeway is expected to relieve the general budget by EUR20 billion (US$21.6 billion) in 2025, but development funding cuts remain likely due to CDU/CSU's insistence on budget consolidation. The CDU aims to reduce ODA spending to 0.35% ODA/GNI, but SPD pushback may keep it above 0.5%.

Economically, loosening the debt brake is projected to boost German growth, potentially increasing output by over 2% annually over the next decade.

On December 17, 2024, the German political parties published their election programs ahead of the February 2025 elections, showing clear differences in their proposals for development cooperation and humanitarian assistance.

The two remaining parties of the governing coalition, the left-leaning SPD and the Greens, both embraced independent development cooperation, led by a strong, independent BMZ.

The center-right opposition party CDU/CSU, by contrast, proposed bringing development cooperation, led by the BMZ, and humanitarian assistance, led by the AA, together. The liberal FPD originally put forth the proposal to merge the BMZ and the AA.

The SPD and Greens emphasized Agenda 2030 and multilateralism as guiding principles and highlighted their continued commitment to 0.7% ODA/GNI. The Greens also proposed leveraging additional funding for climate goals. The CDU/CSU and FPD made no such commitments.

All parties, but the CDU/CSU in particular, stressed a shift to align development with German interests. The CDU/CSU noted its ambition to gear development towards migration management, with criteria intended to stem irregular migration flows. The party also sought to link development to geopolitical and security goals, as well as economic aims and the promotion of international trade.

The SPD and Greens noted their desire to maintain Germany's feminist foreign and development policy, and listed their commitments for global health, climate, and agriculture. The CDU/CSU and FPD did not specifically mention policy aims for health, climate and agriculture, but stated that they will focus on women's rights as part of development policy.

On December 11, 2024, German Development Minister Svenja Schulze presented the 17 ^th Development Policy Report, which highlighted key priorities of German development policy under Schulze, including feminist development policy, global partnership and multilateral cooperation.

Schulze emphasized progress in integrating gender equality across development projects, stating that German development policy is more female-focused, multilateral and based on partnership than before. Accordingly, the report noted that the share of projects addressing gender equality increased from 66% in 2022 to over 91% in 2024.

The report also highlighted Germany's leadership in reforming the World Bank, including increasing its lending capacity, and aligning it with climate, and poverty reduction goals. Also outlined was the enhanced partnership approach with African countries through the German-Africa strategy and activities to establish vaccine and pharmaceutical production in Africa.

On December 1, 2024, German Economic Minister Robert Habeck travelled to Kenya to participate in the 5^th GABS.

Habeck's agenda prioritized green energy, climate change, and skilled labor migration topics. Representatives from BDI called for an increase of investment in African digital infrastructure.

Following the expected success of the conservative-leaning CDU/ CSU parties in the February 2025 German federal elections, prioritization of the private sector is very likely.

GABS has been a central component of the increasing efforts of the German government to prioritize relations with African countries.

On November 19, 2024, Minister for Foreign Affairs Annalena Baerbock traveled to Baku to attend COP29 with Special Representative for International climate policy Jennifer Morgan.

Together with other countries, German Chancellor Scholz signed a statement of the country coalition High Ambition Coalition calling for an increase in international climate financing. The coalition demands increased ambition, yet financing models remain unclear.

The German position is weakened through the governing coalition's break-down on November 6, 2024. Moreover, the German government will likely fail to meet its climate goals, including for international climate finance.

On November, 18, 2024, Development Minister Svenja Schulze traveled to Chad, with the four-day trip focusing on the reception and inclusion of Sudanese refugees.

Schulze highlighted that the humanitarian crisis demands increased attention, and commends the government in Chad for its support to Sudanese refugees. She promised to intensify further support for Chad.

The Sahel region is a priority region. German efforts in the region seek to maintain and strengthen relationships to the West, in particular in light of the increasing role of Russia and the UAE in the region. However, Schulze's commitments come in front of a backdrop of an uncertain Budget situation and a new election scheduled for February 23, 2025.

On November 6, 2024, Germany's 'traffic light' coalition, consisting of SPD, Greens, and FPD, fell apart after German Chancellor Olaf Scholz fired Finance Minister Christian Lindner and announced an impending parliamentary vote of confidence.

The coalition broke down following prolonged conflicts about economic policies and the budget, with the Lindner's pro-business FPD proposing drastically different approaches from those supported by Scholz's SPD and the Greens. Scholz announced a vote of confidence for the coming months, followed by an early election between January-March 2025. Until then, a minority government consisting of SPD and Greens will remain in place.

The budget for 2025, originally scheduled for confirmation on November 14, 2024, will likely not be passed until a new government is in place. A probable outcome is that of prolonged provisional budgeting. While the government will be able to finance its legal obligations, administrative costs, and continue certain necessary expenditures, it will not be able to finance new projects. This will likely impact funding for development and humanitarian assistance.

Passing of any measures will depend on the cooperation of the opposition party CDU/CSU (or less likely the FPD). They might agree to certain measures yet are unlikely to support the budget for 2025. They are also currently not expected to support a reform of the constitutional debt brake, which will also drastically reduce the fiscal leeway of the next government.