German Chancellor Friedrich Merz insisted Monday that his coalition was still on track to deliver promised reforms after a spat between two ministers on how to best tackle rising energy costs.
"I assume that we in the federal government will continue to work well together, completely unscathed by last week's discussion," Merz told a press conference in Berlin.
The public clash erupted last week after Vice Chancellor Lars Klingbeil, from the centre-left SPD, proposed a windfall tax on energy companies benefiting from the war in the Middle East.
Economy Minister Katherina Reiche, from Merz's conservative CDU, railed against the proposal, saying the tax would be "expensive, ineffective and constitutionally questionable".
The comments led to a rebuke from Merz, who said he was "disconcerted by the public exchange of blows" and urged Reiche "to exercise restraint".
Presenting new measures to tackle rising energy costs on Monday including a cut in fuel taxes, Merz said the coalition had "reached a decision on the matter over the weekend".
"What I didn't like was the public debate," he said.
The German government has repeatedly promised wider reforms to boost the economy but progress has been hampered by disagreements within the coalition.
Merz's conservative CDU/CSU alliance favours a more pro?business, fiscally cautious line, while the SPD has proposed higher taxes for the wealthy and more incentives to get people into work.
Merz said Monday that the coalition partners had tackled "two major reform projects" in talks over the weekend, a reform of the German health insurance system and measures to relieve the tax burden on low- and middle-income households.
The details of both are being "worked out intensively" with a view to implementation from January 2027, he said.
Germany's economy had only just been getting back on its feet following Russia's full-scale invasion of Ukraine when the war in the Middle East broke out in late February.
The energy crisis caused by the war in Ukraine pushed the economy into two straight years of recession, in 2023 and 2024.
But Germany eked out meagre growth last year and there were hopes of a stronger rebound this year, though that is now in doubt.
