CPB and PBL Present the Effects of the Coalition Agreement 2026–2030

Budget Effects

The coalition agreement increases defense spending to meet the new NATO standard and limits growth in healthcare and social security expenditures. This is achieved through a higher deductible, cuts in long-term care, and reductions in unemployment and disability benefits. At the same time, income and labor taxes rise due to only partial inflation adjustments in tax brackets and higher premiums. During the cabinet period, the EMU balance improves by 0.2% of GDP, but government debt rises to 137% of GDP by 2060, partly due to increased defense spending and additional investments in housing, climate, and nitrogen.

Economic Effects

The coalition agreement leads to an average purchasing power decline of 0.4% per year, mainly due to higher taxes. Lower incomes are affected more than higher incomes because of the higher deductible and less benefit from the new child scheme. Income security decreases due to changes in unemployment and disability benefits. At the same time, the agreement strengthens human capital through increased education spending and improves public infrastructure and investment climate for scale-ups. Housing market measures slightly increase housing supply in the long term.

Climate, Nature, and Nitrogen

The package of measures moves the cabinet closer to its nitrogen targets, but these are not yet achieved. Subsidies reduce livestock numbers and farmers adopt new techniques. Measures for extensive agriculture around natural areas contribute to nature restoration. Many planned regulations in the coalition agreement still need to be developed, making effects uncertain. Greenhouse gas emission reductions mainly occur in industry through SDE++ subsidies and in the electricity sector through more offshore wind energy. Additional policy is needed to meet the 2050 climate goals.