Chancellor Friedrich Merz presenting a reform package for growth to coalition members in a government setting.
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Coalition agrees on reform package for growth

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The federal government agreed on a package of more than 30 reform measures on Wednesday evening. Chancellor Friedrich Merz presented it on Thursday.

The coalition of the Union and SPD agreed on Wednesday evening on tax relief, labor law relaxations and bureaucracy reduction. This includes higher basic and child allowances as well as expanded fixed-term employment contracts.

Chancellor Friedrich Merz said a family with two children and an annual income of 60,000 euros would be relieved by more than 600 euros per year. Finance Minister Lars Klingbeil announced pragmatic solutions for sick notes from the first day.

The DAX reached a record of 25,655 points on Thursday. Ifo President Clemens Fuest praised the willingness to tackle sacred cows but called for further steps such as cutting government spending.

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Initial reactions on X to the German coalition's reform package under Chancellor Merz show a mix of cautious optimism about economic growth measures and criticism regarding insufficient depth, worker burdens, and political compromises.

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German politicians from Union and SPD celebrating agreement on reform package in Chancellery after negotiations.
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Coalition reaches agreement on reform package

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The leaders of the Union and SPD have agreed on a reform package after seven and a half hours of talks in the Chancellery. Details are to be presented at a press conference on Thursday morning at 9 a.m. The package includes changes to income tax among other measures.

Coalition plans reform package on taxes, pensions and bureaucracy

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.

Coalition seeks consensus with social partners on reforms

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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.

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The Mittelstands- und Wirtschaftsunion (MIT) of the CDU has ruled out higher burdens for top earners ahead of coalition talks. The federal government plans to discuss income tax reform next Wednesday.

Chancellor Merz faces resistance at DGB congress

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Chancellor Friedrich Merz faced interruptions and skepticism from union delegates at the DGB congress in Berlin. Speaking before about 400 attendees, he defended his reform agenda while DGB chair Yasmin Fahimi warned against rolling back labor rights.

Finance Minister Klingbeil announces billion-euro savings measures

German Finance Minister Lars Klingbeil (SPD) detailed specific savings targets for the 2027 federal budget at a press conference in Berlin. The measures aim to close a 111 billion euro financing gap. The largest cuts target pensions at four billion euros.

Government stalls on new fuel price relief package

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Germany's federal government is struggling with a new package to address high fuel prices. The first set of measures had no effect, and petrol and diesel prices rose further. A new law could follow next week.

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