German coalition and social partners agree to continue reform talks after 3.5-hour summit at the Chancellery
The leaders of Germany's CDU/CSU-SPD coalition met with trade union and employer representatives for three and a half hours on Wednesday evening, agreeing to continue talks on a package of economic and social reforms but taking no concrete decisions.
The summit format
Chancellor Friedrich Merz (CDU), SPD parliamentary group leader Matthias Miersch, and CSU chief Markus Söder sat down with business and labour leaders at the Chancellery on Wednesday evening. The meeting lasted roughly three and a half hours, according to participants. Government spokesperson Stefan Kornelius described the atmosphere as "constructive and concentrated."
Good solutions emerge from dialogue.
Merz had framed the gathering on X as a discussion on "how we can strengthen our competitiveness and the labour market." He added that returning Germany to a growth path "is of the highest priority in the coming weeks." Söder wrote on Facebook that the country needs reforms and must move forward together.
Four reform areas
Kornelius said the talks covered four topics: the labour market situation, the stability and safeguarding of social insurance systems, bureaucracy reduction, and tax policy. Participants agreed that Germany as a business location faces major challenges. Technological change, demographic shifts, and multiple global crises require decisive steps for more growth and new value creation, while social systems must be reformed and the bureaucratic burden reduced.
No decisions, but a path forward
No binding decisions were taken, as expected. The government had signalled in advance that the meeting was about building consensus rather than producing resolutions. Business and union representatives expressed willingness to "constructively accompany the reform process," Kornelius said, and further talks were agreed. The format and timing of those follow-up discussions remain open.
- Government appoints pension commission to propose reforms
- Coalition leaders meet social partners at Chancellery; further talks agreed
- Pension commission expected to present reform proposals
- Coalition committee to decide on cornerstones of reform package
Political stakes for the SPD
Securing a continuation of the dialogue is an important win for the SPD. Miersch had warned on Tuesday that the roundtable with social partners must not become a "one-day wonder." After the meeting, party sources said the SPD was satisfied with the results, noting that common ground had been found on energy, taxes, bureaucracy reduction, and innovation.
The upcoming modernisations need broad political legitimacy. Germany has always overcome difficult phases when we tackled them together. If we now continue to closely involve trade unions, employers, and the federal states, necessary reforms can give rise to trust.
Miersch also told SPD MPs that there was agreement that strengthening economic growth is now the top priority, and that dialogue would continue at various levels.
What comes next
The coalition faces its toughest test yet. The coalition committee is scheduled to meet on 1 July to decide on the cornerstones of a reform package covering income tax, social insurance, bureaucracy reduction, and labour market measures. A pension commission appointed by the government last winter is due to present its reform proposals by the end of June. The German economy remains in a prolonged weak phase, with only minimal growth expected this year partly because of oil and gas price spikes linked to the Iran conflict.
IG Metall chair Christiane Brenner told dpa after the meeting: "You see me in a good mood." She declined to elaborate immediately. Other associations indicated they would likely comment only on Thursday.
