German coalition and social partners agree on further reform talks after three-hour Chancellery summit
Chancellor Friedrich Merz hosted a three-and-a-half-hour summit with employers and unions at the Chancellery, with both sides pledging constructive engagement on reforms to boost Germany's competitiveness before a key July 1 coalition committee meeting.
Summit agreement
The leaders of the black-red coalition and representatives of employers and trade unions met at the Chancellery on Wednesday evening. After about three and a half hours of consultations, government spokesman Stefan Kornelius announced that further talks had been agreed and that both sides would "constructively accompany" the reform process. The meeting was described as having a constructive and concentrated atmosphere, though no decisions were taken, as had been expected.
Reform agenda
The discussion ranged across the labor market, the stability of the social security systems, bureaucracy reduction, and tax policy. Participants acknowledged that Germany as a business location faces major challenges. Technological change, demographic developments, and global crises, Kornelius said, compel decisive steps for more growth and new value creation, while the social systems must be reformed and the bureaucratic burden reduced. Further measures to secure jobs and make the location more attractive, including lower energy costs and tax relief for employees, should be tackled "swiftly and decisively."
Voices from the room
Good solutions come from dialogue.
Putting Germany back on a growth track – that is the highest priority in the coming weeks.
There is agreement that strengthening our economic growth is now the top priority.
Our country needs reforms. We must move forward together.
IG Metall chairwoman Christiane Brenner told the press after the meeting, with visible satisfaction, "You see me in good spirits." Other associations indicated they would not comment before Thursday.
Next steps
Union and SPD want to push through fundamental reforms before the summer recess. The coalition committee is scheduled to meet on July 1 to agree on the key points. A pension commission appointed by the government last winter is expected to submit its reform proposals by the end of June. Further dialogue with the social partners at various levels is also to be maintained.
- Coalition and social partners hold summit at Chancellery; further talks agreed
- Pension commission expected to submit reform proposals
- Coalition committee meets to decide key points of reform package
Economic headwinds
Germany's economy is in a prolonged phase of weakness. Only minimal growth is expected this year, mainly because of oil and gas price jumps resulting from the Iran war. Merz has made strengthening the economy's competitiveness his stated goal, and the reform package is seen as the coalition's toughest test yet.
