German coalition factions agree on year-end reform roadmap as Bas questions sick note rule

Faction retreat in Münster and coalition reset

Leadership delegations from the CDU/CSU and SPD parliamentary groups concluded a one-and-a-half-day retreat in Münster on Friday, setting a joint four-month roadmap to pass pending domestic reforms before year-end. The meeting marked the first joint retreat for Thorsten Frei as head of the Union parliamentary group, following the resignation of Jens Spahn and a cabinet reshuffle. Alongside SPD leader Matthias Miersch and CSU regional group leader Alexander Hoffmann, the faction leaders sought to project unity following the cabinet retreat in Neuhardenberg. The gathering, which included discussions with the Bishop of Münster and the chief executive of Mercedes-Benz, coincided with the 80th anniversary of North Rhine-Westphalia. Seeking to counter what Chancellor Friedrich Merz called a prevailing climate of discontent, Hoffmann framed the agreement around a new slogan, the courage of Münster, invoking the spirit of Würzburg established during their retreat one year earlier.

We want to be drivers and not nodders of the government.

Pension reform and internal coalition dissent

The legislative agenda centers on an overhaul of the pension system based on more than 30 proposals from the government pension commission. Chancellor Friedrich Merz and Labor Minister Bärbel Bas intend to implement the measures as a unified package, including the elimination of deduction-free retirement after 45 contribution years. The repeal faces resistance within both parties, drawing opposition from three CDU state premiers in eastern Germany and four SPD state premiers. In response, lawmakers are considering hardship provisions and transition rules for physically demanding occupations. Bas expressed openness to a five-year transition window, citing pension commission chair Constanze Janda. Regional friction also surfaced in a letter from SPD lawmakers in the Ruhr district, led by Markus Töns, who criticized Merz for a lack of respect in communicating reform and spending measures.

This is a firm roadmap that citizens and companies can now orient themselves by.

Disputes over sick leave and certification requirements

Hours after the Münster meeting concluded, Labor Minister Bärbel Bas publicly questioned the coalition plan requiring employees to submit a doctor note on the first day of illness. Bas stated that the SPD agreed to day-one certification reluctantly to prevent CDU/CSU demands for unpaid waiting days and cuts to statutory sick pay. She argued that extensive exemptions, such as those for companies with collective bargaining agreements, undermined the rule, while warning that day-one doctor visits could turn brief illnesses into week-long absences. Bas also announced she will not submit an implementation proposal until Health Minister Carsten Linnemann introduces accompanying measures guaranteeing doctor appointments and stroke prevention.

I am loyal to the coalition, but we should ask ourselves again whether this makes sense.

Tax negotiations and the year-end legislative schedule

Income tax reform remains another contentious item on the legislative calendar. While the coalition agreed on 10 billion euros in annual income tax relief starting in 2028, Union lawmakers criticized the draft by Finance Minister Lars Klingbeil for failing to offset inflation-driven bracket creep. The SPD maintained that broader relief requires Union compromises on the top income tax rate or inheritance taxes, while party members also proposed a wealth tax on billionaires. The agreed Münster timetable additionally charges parliament with finalizing measures on fixed-term employment contracts, elder care, climate policy, tenancy law, security, and bureaucracy reduction before the end of the year.