Coalition seeks consensus with social partners on reforms

The black-red coalition agreed with employers and unions on further talks on reforms during a meeting at the Chancellery. The goal is to strengthen Germany’s competitiveness.

The previous evening representatives of the CDU, CSU and SPD led by Chancellor Friedrich Merz met with heads of business associations and unions. The round lasted three and a half hours and addressed the labor market situation, the stability of social insurance systems, bureaucracy reduction and tax policy. Government spokesman Stefan Kornelius said afterwards that all sides had expressed willingness to accompany the reform process constructively. Further talks had been agreed. Merz had written earlier on the platform X that good solutions arise in dialogue. By 1 July the coalition committee is to adopt key points for a reform package. These include changes to income tax, social insurance and the labor market. The pension commission is to present its proposals by the end of June.

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Chancellor Friedrich Merz has called on coalition partner SPD to lift blockades on reform projects. At an event of the German Banks Association in Berlin, he announced serious talks for the evening. Energy policy, pension reform, and statutory health insurance are in focus.

Germany's black-red federal government aims to pass a package of reforms covering taxes, the labor market, pensions and bureaucracy reduction before the summer break. A further coalition committee meeting shortly before the parliamentary summer recess in early July is set to make the decisions. Chancellor Friedrich Merz will invite social partners to the chancellery in early June.

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On Labour Day, German unions announced strong resistance to planned cuts in pensions, healthcare, and social benefits. DGB leader Yasmin Fahimi warned of societal conflicts. Over 366,000 people attended rallies.

Following Chancellor Merz's announcement that the bill was practically ready, the German government finalized its health reform draft on April 28, targeting 16.3 billion euros in savings from 2027—down from an initial 19.6 billion—to address a 15.3 billion euro deficit at statutory health insurers. The Greens decry it as a burden on insured people and companies, while Health Minister Nina Warken calls it balanced. Cabinet approval is set for Wednesday.

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