During discussions at the Coalition Committee, Roland Koch (CDU) and Peer Steinbrück (SPD) are advocating for a systematic reduction of subsidies, which they refer to as the “lawnmower method”. According to Steinbrück, who spoke to the Handelsblatt, he believes the method is valuable; he cautioned that attempting to cut subsidies individually can quickly become overly complicated and ineffective. Koch stated that a useful mechanism is needed to reduce funds without having to justify cuts for every single specific contribution.
The two former state premiers of Hesse and North Rhine-Westphalia developed a concept for subsidy cuts in 2003, which became known as the “Koch-Steinbrück List”. Currently, the federal government is engaging in negotiations regarding major subsidy reductions. These proposed cuts are intended both to plug budget gaps and to co-finance the planned tax reform for 2027.
Steinbrück referenced a report from the Kiel Institute for the World Economy, which indicated that overall state subsidies amounted to approximately 285 billion euros in 2024. He expressed confidence that a saving of between ten and fifteen percent was feasible through this approach, thereby helping to finance the tax reform.
Koch echoed the sentiment that such reductions are always possible, noting, “Every CEO knows: ten percent always goes”. He reminded the public that at the time of developing their initial concept, they gathered all possible ideas to find areas of agreement, and the remaining scope was significant. Koch stressed that the method had proven successful and urged the current federal government to adopt it. The CDU politician remains convinced that the necessary ten billion euros can be saved in a foreseeable period-perhaps within two years-and that this saving would be permanent, not merely a temporary one-off effect.
