{"id":2023120,"date":"2026-07-02T13:01:12","date_gmt":"2026-07-02T10:01:12","guid":{"rendered":"https:\/\/analyse.optim.biz\/?p=2023120"},"modified":"2026-07-02T13:01:12","modified_gmt":"2026-07-02T10:01:12","slug":"germanys-merz-announces-sweeping-reforms-tax-cuts-pension-overhaul-and-new-sick-leave-rules","status":"publish","type":"post","link":"https:\/\/analyse.optim.biz\/?p=2023120","title":{"rendered":"Germany&#8217;s Merz announces sweeping reforms: Tax cuts, pension overhaul and new sick leave rules"},"content":{"rendered":"<p>[analyse_image type=&#8221;featured&#8221; src=&#8221;https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/87\/1200x675_cmsv2_d3029938-f205-5cf7-a80e-ce602bdb5970-9822187.jpg&#8221;]<\/p>\n<article id=\"abe-2906792-pos1-c-latest-stories\" class=\"the-media-object m-modeMobile-1 m-modeDesktop-1 m-modeXL-1\" data-nid=\"2906792\" data-cid=\"9822949\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906792-label-pos1-c-latest-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/29\/49\/189x106_cmsv2_ecbb4d1f-31e6-57c7-9a74-541dc94b9b82-9822949.jpg\" loading=\"lazy\" alt=\"Protesters try to remove a barricade as police hold it during clashes at an anti-government rally in Tirana, 2 July, 2026\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Europe News<\/p>\n<div class=\"the-media-object__title  \">\n<p>    Albanian police fire water cannon as Trump-linked protests boil over\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906797-pos2-c-latest-stories\" class=\"the-media-object m-modeMobile-1 m-modeDesktop-1 m-modeXL-1\" data-nid=\"2906797\" data-cid=\"9822978\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906797-label-pos2-c-latest-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/29\/78\/189x106_cmsv2_0a631976-d39f-51a5-90aa-d046ec3ee170-9822978.jpg\" loading=\"lazy\" alt=\"There are some budget airline routes to Asian destinations like Phuket if you go via the Middle East or India\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Destinations<\/p>\n<div class=\"the-media-object__title  \">\n<p>    How to fly to Asia from Europe for less\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906747-pos3-c-latest-stories\" class=\"the-media-object m-modeMobile-1 m-modeDesktop-1 m-modeXL-1\" data-nid=\"2906747\" data-cid=\"9822697\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906747-label-pos3-c-latest-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/26\/97\/189x106_cmsv2_2f053cbc-7a45-5d1f-bcb4-f887f33d1479-9822697.jpg\" loading=\"lazy\" alt=\"Air conditioning external units are seen on the wall of a building in Rome, Tuesday, July 25, 2023.\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Europe News<\/p>\n<div class=\"the-media-object__title  \">\n<p>    Brussels supports air conditioning\u2014but not as the main answer\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906775-pos4-c-latest-stories\" class=\"the-media-object m-modeMobile-1 m-modeDesktop-1 m-modeXL-1\" data-nid=\"2906775\" data-cid=\"9822834\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906775-label-pos4-c-latest-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/28\/34\/189x106_cmsv2_fb112389-2c57-53ac-9d33-1086f4fd970b-9822834.jpg\" loading=\"lazy\" alt=\"Workers complete an electric car on an assembly line during a press tour at a Volkswagen AG plant in Germany.\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Europe News<\/p>\n<div class=\"the-media-object__title  \">\n<p>    EU car industry clashes over strategy to fight Chinese competitors\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906792-pos1-c-latest-stories-sidebar\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2\" data-nid=\"2906792\" data-cid=\"9822949\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906792-label-pos1-c-latest-stories-sidebar\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/29\/49\/189x106_cmsv2_ecbb4d1f-31e6-57c7-9a74-541dc94b9b82-9822949.jpg\" loading=\"lazy\" alt=\"Protesters try to remove a barricade as police hold it during clashes at an anti-government rally in Tirana, 2 July, 2026\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Europe News<\/p>\n<div class=\"the-media-object__title  \">\n<p>    Albanian police fire water cannon as Trump-linked protests boil over\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906797-pos2-c-latest-stories-sidebar\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2\" data-nid=\"2906797\" data-cid=\"9822978\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906797-label-pos2-c-latest-stories-sidebar\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/29\/78\/189x106_cmsv2_0a631976-d39f-51a5-90aa-d046ec3ee170-9822978.jpg\" loading=\"lazy\" alt=\"There are some budget airline routes to Asian destinations like Phuket if you go via the Middle East or India\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Destinations<\/p>\n<div class=\"the-media-object__title  \">\n<p>    How to fly to Asia from Europe for less\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906747-pos3-c-latest-stories-sidebar\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2\" data-nid=\"2906747\" data-cid=\"9822697\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906747-label-pos3-c-latest-stories-sidebar\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/26\/97\/189x106_cmsv2_2f053cbc-7a45-5d1f-bcb4-f887f33d1479-9822697.jpg\" loading=\"lazy\" alt=\"Air conditioning external units are seen on the wall of a building in Rome, Tuesday, July 25, 2023.\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Europe News<\/p>\n<div class=\"the-media-object__title  \">\n<p>    Brussels supports air conditioning\u2014but not as the main answer\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article id=\"abe-2906775-pos4-c-latest-stories-sidebar\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2\" data-nid=\"2906775\" data-cid=\"9822834\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906775-label-pos4-c-latest-stories-sidebar\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/28\/34\/189x106_cmsv2_fb112389-2c57-53ac-9d33-1086f4fd970b-9822834.jpg\" loading=\"lazy\" alt=\"Workers complete an electric car on an assembly line during a press tour at a Volkswagen AG plant in Germany.\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n                    Europe News<\/p>\n<div class=\"the-media-object__title  \">\n<p>    EU car industry clashes over strategy to fight Chinese competitors\n  <\/p><\/div>\n<\/div>\n<\/article>\n<article class=\"helper-site-row o-article-newsy\">\n<div class=\"helper-site-container o-article-newsy__container\">\n<div class=\"o-article-newsy__main\">\n<header class=\"h-grid o-article-newsy__main__header\">\n<nav aria-label=\"Breadcrumbs\" class=\"c-article-breadcrumbs\">\n<div id=\"adb-article-breadcrumb\" class=\"c-article-breadcrumbs__list\">\n<p>                          Europe<\/p>\n<p>                          Europe News<\/p><\/div>\n<\/nav>\n<h1 class=\"c-article-redesign-title\">\n                            Germany&#8217;s Merz announces sweeping reforms: Tax cuts, pension overhaul and new sick leave rules<\/h1>\n<div class=\"c-article-image-video u-position-relative \">\n<div class=\"js-superdiv u-aspect-ratio-16x9 u-position-relative \" data-sponsored=\"Partner content\"><img fetchpriority=\"high\" decoding=\"async\" class=\"js-poster-img c-article-media__img\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/87\/1536x864_cmsv2_d3029938-f205-5cf7-a80e-ce602bdb5970-9822187.jpg\" width=\"1536\" height=\"864\" loading=\"eager\" alt=\"German Chancellor Friedrich Merz speaks during the question-and-answer session with the government in the Bundestag in Berlin, 24 June, 2026\"><\/div>\n<div class=\"c-article-caption u-position-absolute\"><i id=\"article-caption-content\" class=\"c-article-caption__content\"><span class=\"c-article-caption__text\"><br \/>\n              German Chancellor Friedrich Merz speaks during the question-and-answer session with the government in the Bundestag in Berlin, 24 June, 2026<br \/>\n                    <span class=\"u-color-white\">&#8211;\u00a0<\/span><span class=\"c-article-caption__copyright\">Copyright\u00a0<\/span><span class=\"c-article-caption__credit\">AP Photo<\/span><\/span><\/i><\/div>\n<div class=\"c-article-image-copyright c-article-image-copyright--novideo\">\n      Copyright\u00a0AP Photo\n  <\/div>\n<\/div>\n<\/header>\n<div class=\"h-grid o-article-newsy__main__body u-article-content\">\n<div class=\"o-article-newsy__contributors-publication-date\">\n<div class=\"c-article-contributors\">\n  By&amp;nbspKirsten Ripper\n<\/div>\n<div class=\"c-article-publication-date\" data-timestamp=\"1782997272\">\n         Published on<br \/>\n            <time datetime=\"2026-07-02 15:01:12 +02:00\">02\/07\/2026 &#8211; 15:01 GMT+2<\/time><\/div>\n<\/div>\n<div class=\"c-article-share-comment u-align-items-center 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height=\"24\" alt=\"whatsapp\" loading=\"lazy\"><span>Whatsapp<\/span><\/span><img decoding=\"async\" src=\"https:\/\/static.euronews.com\/website\/images\/vector\/social-icons\/article-redesign-whatsapp.svg\" width=\"48\" height=\"48\" alt=\"whatsapp\" class=\"u-show-for-desktop\" loading=\"lazy\"><\/div>\n<div class=\"c-article-share-comment-popup__content__embed_container u-display-none\"><span class=\"c-article-share-comment-popup__content__embed__tooltip\"><br \/>\n                            Copy\/paste the article video embed link below:<br \/>\n                        <\/span><span class=\"c-article-share-comment-popup__content__embed u-display-flex\"><img decoding=\"async\" src=\"https:\/\/static.euronews.com\/website\/images\/vector\/icon-copy-to-clipboard.svg\" width=\"16\" height=\"16\" alt=\"Copy to clipboard\" class=\"u-cursor-pointer js-c-article-share-comment-copy\" loading=\"lazy\"><span class=\"c-article-share-comment-popup__content__embed--success-copied u-display-none js-c-article-share-comment-video-embed-success-link-copied\"><br \/>\n                                Copied<br \/>\n                            <\/span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2 class=\"c-article-summary\">\n        After seven hours of talks, the CDU\/CSU-SPD coalition agreed on sweeping tax, labour and pension reforms, a breakthrough aimed at reviving the struggling economy and countering the rise of the far right.<br \/>\n    <\/h2>\n<div class=\"c-article-content js-article-content\">\n<p>Germany&#8217;s ruling coalition presented a comprehensive reform package on Thursday with the goal of getting the country&#8217;s sluggish economy back on track.<\/p>\n<div>\n<div class=\"c-ad u-show-for-mobile-only\">\n<div class=\"c-ad__placeholder\"><img decoding=\"async\" class=\"c-ad__placeholder__logo\" src=\"https:\/\/static.euronews.com\/website\/images\/logos\/logo-euronews-stacked-outlined-72x72-grey-9.svg\" width=\"72\" height=\"72\" alt loading=\"lazy\"><span>ADVERTISEMENT<\/span><\/div>\n<\/div>\n<div class=\"c-ad u-show-for-desktop\">\n<div class=\"c-ad__placeholder\"><img decoding=\"async\" class=\"c-ad__placeholder__logo\" src=\"https:\/\/static.euronews.com\/website\/images\/logos\/logo-euronews-stacked-outlined-72x72-grey-9.svg\" width=\"72\" height=\"72\" alt loading=\"lazy\"><span>ADVERTISEMENT<\/span><\/div>\n<\/div>\n<\/div>\n<p>The coalition of CDU, CSU and SPD have agreed on 34 measures that include cuts to income tax for low- and middle income families, an overhaul of the creaking pension system and tougher rules for employees&#8217; sick leave.<\/p>\n<p>&#8220;We are working to increase the flexibility of our businesses,&#8221; Chancellor Friedrich Merz told a press conference in Berlin after seven hours of talks.<\/p>\n<p>&#8220;We are working to cut red tape. We are working to protect our welfare state, and we are working to ease the burden on employees and companies by lowering taxes,&#8221; said Merz while presenting the &#8220;Programme for Revival and Employment&#8221;.<\/p>\n<p>The tax relief would mean an average family is about 600 euros better off per year, the parties said.<\/p>\n<p>SPD leader and Vice-Chancellor Lars Klingbeil said he was satisfied with the agreement.<\/p>\n<div class=\"widget widget--type-image widget--size-fullwidth widget--animation-fade-in widget--align-center\" data-ratio=\"0.667\">\n<div class=\"widget__wrapper\">\n<div class=\"widget__ratio widget__ratio--auto\">\n<div class=\"widget__contents\">\n<figure class=\"widget__figure\"><img decoding=\"async\" class=\"widgetImage__image\" loading=\"lazy\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/87\/808x539_cmsv2_168be0e1-c699-55a4-b0fb-ad05b33dd54b-9822187.jpg\" alt=\"German Chancellor Friedrich Merz speaks in the plenary chamber of the Bundestag during a government statement in Berlin, 11 June, 2026\"><figcaption class=\"widget__caption\"><span class=\"widget__captionWrap\"><span class=\"widget__captionText\">German Chancellor Friedrich Merz speaks in the plenary chamber of the Bundestag during a government statement in Berlin, 11 June, 2026<\/span><span class=\"widget__captionCredit\">AP Photo<\/span><\/span><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2>The key decisions:<\/h2>\n<p><strong>Income tax<\/strong><\/p>\n<p>The top income tax rate of 42% will remain unchanged, but in future it will only apply to incomes above the current threshold of \u20ac70,000.<\/p>\n<p>On the tax on the rich, the coalition has agreed a tiered system. From an annual income of \u20ac250,000 a rate of 45% is to apply; anyone earning more than \u20ac280,000 will in future pay 47%. The coalition calls this a &#8220;fair sharing of the burden through a moderate increase in the tax on the rich.&#8221;<\/p>\n<p>The total tax relief provided by the reform amounts to approximately \u20ac10 billion per year.<\/p>\n<p><strong>More fixed-term employment and Sunday opening hours<\/strong><\/p>\n<p>To give the economy more flexibility, the coalition wants to expand the options for fixed-term employment contracts and allow longer Sunday opening hours.<\/p>\n<p><strong>End to sick notes by telephone<\/strong><\/p>\n<p>The tougher rules for sick leave would no longer allow employees to call in sick to work for up to three days without seeing a doctor or call up the doctor and ask for a sick leave letter of one week without actually seeing the doctor. <\/p>\n<p>Instead, employers would be able to ask for a doctor&#8217;s certificate from the first day a person is on sick leave.<\/p>\n<div class=\"widget widget--type-image widget--size-fullwidth widget--animation-fade-in widget--align-center\" data-ratio=\"0.6665\">\n<div class=\"widget__wrapper\">\n<div class=\"widget__ratio widget__ratio--auto\">\n<div class=\"widget__contents\">\n<figure class=\"widget__figure\"><img decoding=\"async\" class=\"widgetImage__image\" loading=\"lazy\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/87\/808x539_cmsv2_7be4a7a5-09f0-5ccc-b1d4-af1cf20da3c9-9822187.jpg\" alt=\"A machine operator stands in the bottling plant of herbal liqueur manufacturer J\u00e4germeister in Kamenz, 23 April, 2026 \"><figcaption class=\"widget__caption\"><span class=\"widget__captionWrap\"><span class=\"widget__captionText\">A machine operator stands in the bottling plant of herbal liqueur manufacturer J\u00e4germeister in Kamenz, 23 April, 2026 <\/span><span class=\"widget__captionCredit\">AP Photo<\/span><\/span><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>Merz had repeatedly complained that the rate of sick leave is too high in Germany, harming productivity.<\/p>\n<p>In future, employees will be required to present a certificate of incapacity for work from the very first day they are off sick.<\/p>\n<p><strong>No more nationalisation of housing companies<\/strong><\/p>\n<p>The nationalisation of housing companies is to be banned. The aim is to reduce uncertainty for investors.<\/p>\n<p><strong>Cutting red tape<\/strong><\/p>\n<p>As part of efforts to cut red tape, the legal bases for state benefits are to be time-limited, as these so-called sunset clauses are seen as an effective tool for streamlining regulation.<\/p>\n<div class=\"widget widget--type-image widget--size-fullwidth widget--animation-fade-in widget--align-center\" data-ratio=\"0.6665\">\n<div class=\"widget__wrapper\">\n<div class=\"widget__ratio widget__ratio--auto\">\n<div class=\"widget__contents\">\n<figure class=\"widget__figure\"><img decoding=\"async\" class=\"widgetImage__image\" loading=\"lazy\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/74\/39\/83\/808x539_cmsv2_3915a678-cf58-593c-8b99-cf05dea123da-9743983.jpg\" alt=\"Cars are parked to be loaded at the port of Emden, 23 April, 2026\"><figcaption class=\"widget__caption\"><span class=\"widget__captionWrap\"><span class=\"widget__captionText\">Cars are parked to be loaded at the port of Emden, 23 April, 2026<\/span><span class=\"widget__captionCredit\">AP Photo<\/span><\/span><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><strong>Pension reform<\/strong><\/p>\n<p>The pension system reform would include gradually raising the retirement age, currently between 65-67 years depending on the number of years worked, in line with life expectancy. <\/p>\n<p>The coalition leaders said they would implement the recommendations presented by a government-mandated panel of experts and politicians last month to stabilise the pension system. The aim is to prevent the level of pensions from falling and ward off the need for a big, long-term increase of the levy employees pay into the pension system.<\/p>\n<p>Labour Minister B\u00e4rbel Bas (SPD) described the pension package as a &#8220;masterpiece&#8221; and Merz also promised to implement the proposals.<\/p>\n<p>The most contentious issues between the Christian Democrats and the Social Democrats were the tax reforms, with the SPD wanting richer people in Germany to contribute more, while the CDU\/CSU had in principle ruled out tax increases.<\/p>\n<div class=\"c-widget-related\" data-stories-id data-event=\"widget_related\">\n<div class=\"c-widget-related__title\"><b class=\"c-widget-related__title__text\" lang=\"en\">Related<\/b><\/div>\n<ul class=\"c-widget-related__list\">\n<li class=\"c-widget-related__item\">Which Europeans pay the most income tax and where do children make the biggest difference?<\/li>\n<li class=\"c-widget-related__item\">Top personal income tax rates in Europe: Who pays the most in 2026?<\/li>\n<\/ul>\n<\/div>\n<h2>Pressure from state elections in September<\/h2>\n<p>The government is also keen to show it can get to grips with the country&#8217;s problems and to diminish the appeal of the AfD, which has been topping national opinion polls for months.<\/p>\n<p>State elections are scheduled for September in Saxony-Anhalt, Berlin and Mecklenburg-Western Pomerania. In the polls, the AfD is ahead in Saxony-Anhalt and Mecklenburg-Western Pomerania.<\/p>\n<p>In Berlin, the CDU led by Kai Wegner has slipped to fourth place in an RBB poll for the state parliament, behind all opposition parties, the Left, the AfD and the Greens.<\/p>\n<div class=\"widget widget--type-image widget--size-fullwidth widget--animation-fade-in widget--align-center\" data-ratio=\"0.7075\">\n<div class=\"widget__wrapper\">\n<div class=\"widget__ratio widget__ratio--auto\">\n<div class=\"widget__contents\">\n<figure class=\"widget__figure\"><img decoding=\"async\" class=\"widgetImage__image\" loading=\"lazy\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/87\/808x573_cmsv2_4d6ead52-580c-50f6-bb4e-f369da960a1f-9822187.jpg\" alt=\"The AfD\u2019s Alice Weidel speaks before the start of the parliamentary group meeting in the German parliament in Berlin, 21 April, 2026\"><figcaption class=\"widget__caption\"><span class=\"widget__captionWrap\"><span class=\"widget__captionText\">The AfD\u2019s Alice Weidel speaks before the start of the parliamentary group meeting in the German parliament in Berlin, 21 April, 2026<\/span><span class=\"widget__captionCredit\">AP Photo<\/span><\/span><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>Alice Weidel, the co-leader of the far-right Alternative for Germany party, which placed second in national elections last year, derided the reform package.<\/p>\n<p>On X, she called the measures an &#8220;even more left-wing redistribution and minimal compromises that don\u2019t deserve to be called &#8216;reforms.'&#8221;<\/p>\n<p>&#8220;The fact that this is being sold as a \u2018breakthrough\u2019 shows only one thing: this government\u2019s complete inability to reform,&#8221; she wrote.<\/p>\n<\/div>\n<footer class=\"perf-cv-auto c-article-contributors c-article-contributors-supplementary u-margin-top-2 u-padding-top-2\">\n<p>Additional sources<strong> \u2022 AP, AFP<\/strong><\/p>\n<\/footer>\n<p>                                  Go to accessibility shortcuts<\/p>\n<div class=\"c-article-share-comment u-align-items-center u-display-flex\"><span class=\"c-article-share-comment__links u-align-items-center u-display-flex u-justify-content-center js-c-article-share-comment-share\"><span class=\"c-article-share-comment__label\">Share<\/span><\/span><span class=\"c-article-share-comment__label\">Comments<\/span><span class=\"c-article-share-comment__label c-article-share-comment__label--always\">Add Euronews on Google<\/span><\/div>\n<div id=\"adb-article-you-might-also-like\" class=\"perf-cv-auto c-article-you-might-also-like\">\n<h2 class=\"c-article-you-might-also-like__title\">\n        Read more<br \/>\n      <\/h2>\n<div class=\"c-article-you-might-also-like__item\">\n<h3>\n<p>                  Young Europeans are putting money into a pension system they don&#8217;t trust, study shows<\/p>\n<\/h3>\n<\/div>\n<div class=\"c-article-you-might-also-like__item\">\n<h3>\n<p>                  Merz doubles down on opposition to \u2018Draghi-style\u2019 common debt proposal<\/p>\n<\/h3>\n<\/div>\n<div class=\"c-article-you-might-also-like__item\">\n<h3>\n<p>                  German Chancellor Merz the most unpopular head of government in the world, survey shows<\/p>\n<\/h3>\n<\/div>\n<\/div>\n<div class=\"perf-cv-auto\">\n<ul id=\"adb-article-tags\" class=\"c-tags-list\">\n<li class=\"c-tags-list__item\">\n<section class=\"tc-cta\" data-twig-component=\"Cta-default\">\n  christian democrats<br \/>\n<\/section>\n<\/li>\n<li class=\"c-tags-list__item\">\n<section class=\"tc-cta\" data-twig-component=\"Cta-default\">\n  Retirement reform<br \/>\n<\/section>\n<\/li>\n<li class=\"c-tags-list__item\">\n<section class=\"tc-cta\" data-twig-component=\"Cta-default\">\n  Taxes<br \/>\n<\/section>\n<\/li>\n<li class=\"c-tags-list__item\">\n<section class=\"tc-cta\" data-twig-component=\"Cta-default\">\n  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boil over<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906665-pos4-top-stories\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2 the-media-object--no-label\" data-nid=\"2906665\" data-cid=\"9822183\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906665-label-pos4-top-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/83\/320x180_cmsv2_bc530208-d58e-5910-a76e-72d6ded1270f-9822183.jpg\" loading=\"lazy\" alt=\"Travellers queue up at Zaventem airport in Brussels.\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Entry-Exit System could be a nightmare for Europe&#8217;s summer travellers<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906757-pos5-top-stories\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2 the-media-object--no-label\" data-nid=\"2906757\" data-cid=\"9822736\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906757-label-pos5-top-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/27\/36\/320x180_cmsv2_54b0ae3b-cdf6-5255-abaa-474a6ba109e7-9822736.jpg\" loading=\"lazy\" alt=\"Residents remove rubble from damaged buildings in the al-Hajar al-Aswad neighbourhood on the outskirts of Damascus, 29 April, 2026\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Damascus explosion caused by bomb, Syrian state TV says<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906747-pos6-top-stories\" class=\"the-media-object m-modeMobile-2 m-modeDesktop-2 m-modeXL-2 the-media-object--no-label\" data-nid=\"2906747\" data-cid=\"9822697\" data-part-label=\"Partner content\">\n<figure id=\"abe-2906747-label-pos6-top-stories\" class=\"the-media-object__figure\"><img decoding=\"async\" class=\"the-media-object__image\" src=\"https:\/\/images.euronews.com\/articles\/stories\/09\/82\/26\/97\/320x180_cmsv2_2f053cbc-7a45-5d1f-bcb4-f887f33d1479-9822697.jpg\" loading=\"lazy\" alt=\"Air conditioning external units are seen on the wall of a building in Rome, Tuesday, July 25, 2023.\" height=\"9\" width=\"16\"><\/figure>\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Brussels supports air conditioning\u2014but not as the main answer<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906338-pos1-mostViewed\" class=\"the-media-object m-modeMobile-3 m-modeDesktop-3 m-modeXL-3 the-media-object--no-label\" data-nid=\"2906338\" data-cid=\"9820430\" data-part-label=\"Partner content\">\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Nine of the top 10 strongest passports globally are European<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2905837-pos2-mostViewed\" class=\"the-media-object m-modeMobile-3 m-modeDesktop-3 m-modeXL-3 the-media-object--no-label\" data-nid=\"2905837\" data-cid=\"9819253\" data-part-label=\"Partner content\">\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    New venomous spider species discovered in Portugal<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906339-pos3-mostViewed\" class=\"the-media-object m-modeMobile-3 m-modeDesktop-3 m-modeXL-3 the-media-object--no-label\" data-nid=\"2906339\" data-cid=\"9820431\" data-part-label=\"Partner content\">\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Russia closes railway borders with Finland, Estonia and Latvia<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906295-pos4-mostViewed\" class=\"the-media-object m-modeMobile-3 m-modeDesktop-3 m-modeXL-3 the-media-object--has-video the-media-object--no-label\" data-nid=\"2906295\" data-cid=\"9820269\" data-part-label=\"Partner content\">\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Heat kills 900 in Spain&#8217;s second-hottest June on record<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<article id=\"abe-2906381-pos5-mostViewed\" class=\"the-media-object m-modeMobile-3 m-modeDesktop-3 m-modeXL-3 the-media-object--no-label\" data-nid=\"2906381\" data-cid=\"9820618\" data-part-label=\"Partner content\">\n<div class=\"the-media-object__content\">\n<h3 class=\"the-media-object__title  \">\n<p>    Did The Simpsons really predict the final of the 2026 World Cup?<br \/>\n  <\/h3>\n<\/div>\n<\/article>\n<div class=\"articleBody\" data-key=\"articleBody\">Germany&#8217;s ruling coalition presented a comprehensive reform package on Thursday with the goal of getting the country&#8217;s sluggish economy back on track.The coalition of CDU, CSU and SPD have agreed on 34 measures that include cuts to income tax for low- and middle income families, an overhaul of the creaking pension system and tougher rules for employees&#8217; sick leave.&#8221;We are working to increase the flexibility of our businesses,&#8221; Chancellor Friedrich Merz told a press conference in Berlin after seven hours of talks.&#8221;We are working to cut red tape. We are working to protect our welfare state, and we are working to ease the burden on employees and companies by lowering taxes,&#8221; said Merz while presenting the &#8220;Programme for Revival and Employment&#8221;.The tax relief would mean an average family is about 600 euros better off per year, the parties said.SPD leader and Vice-Chancellor Lars Klingbeil said he was satisfied with the agreement.The key decisions:\u00a0Income taxThe top income tax rate of 42% will remain unchanged, but in future it will only apply to incomes above the current threshold of \u20ac70,000.On the tax on the rich, the coalition has agreed a tiered system. From an annual income of \u20ac250,000 a rate of 45% is to apply; anyone earning more than \u20ac280,000 will in future pay 47%. The coalition calls this a &#8220;fair sharing of the burden through a moderate increase in the tax on the rich.&#8221;The total tax relief provided by the reform amounts to approximately \u20ac10 billion per year.More fixed-term employment and Sunday opening hours\u00a0To give the economy more flexibility, the coalition wants to expand the options for fixed-term employment contracts and allow longer Sunday opening hours.End to sick notes by telephoneThe tougher rules for sick leave would no longer allow employees to call in sick to work for up to three days without seeing a doctor or call up the doctor and ask for a sick leave letter of one week without actually seeing the doctor.Instead, employers would be able to ask for a doctor&#8217;s certificate from the first day a person is on sick leave.Merz had repeatedly complained that the rate of sick leave is too high in Germany, harming productivity.In future, employees will be required to present a certificate of incapacity for work from the very first day they are off sick.No more nationalisation of housing companiesThe nationalisation of housing companies is to be banned. The aim is to reduce uncertainty for investors.Cutting red tapeAs part of efforts to cut red tape, the legal bases for state benefits are to be time-limited, as these so-called sunset clauses are seen as an effective tool for streamlining regulation.Pension reformThe pension system reform would include gradually raising the retirement age, currently between 65-67 years depending on the number of years worked, in line with life expectancy.The coalition leaders said they would implement the recommendations presented by a government-mandated panel of experts and politicians last month to stabilise the pension system. The aim is to prevent the level of pensions from falling and ward off the need for a big, long-term increase of the levy employees pay into the pension system.Labour Minister B\u00e4rbel Bas (SPD) described the pension package as a &#8220;masterpiece&#8221; and Merz also promised to implement the proposals.The most contentious issues between the Christian Democrats and the Social Democrats were the tax reforms, with the SPD wanting richer people in Germany to contribute more, while the CDU\/CSU had in principle ruled out tax increases.Pressure from state elections in SeptemberThe government is also keen to show it can get to grips with the country&#8217;s problems and to diminish the appeal of the AfD, which has been topping national opinion polls for months.State elections are scheduled for September in Saxony-Anhalt, Berlin and Mecklenburg-Western Pomerania. In the polls, the AfD is ahead in Saxony-Anhalt and Mecklenburg-Western Pomerania.In Berlin, the CDU led by Kai Wegner has slipped to fourth place in an RBB poll for the state parliament, behind all opposition parties, the Left, the AfD and the Greens.Alice Weidel, the co-leader of the far-right Alternative for Germany party, which placed second in national elections last year, derided the reform package.On X, she called the measures an &#8220;even more left-wing redistribution and minimal compromises that don\u2019t deserve to be called &#8216;reforms.'&#8221;&#8221;The fact that this is being sold as a \u2018breakthrough\u2019 shows only one thing: this government\u2019s complete inability to reform,&#8221; she wrote.<\/div>\n<p>[analyse_source url=&#8221;http:\/\/www.euronews.com\/my-europe\/2026\/07\/02\/germanys-merz-announces-sweeping-reforms-tax-cuts-pension-overhaul-and-new-sick-leave-rule&#8221;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[analyse_image type=&#8221;featured&#8221; src=&#8221;https:\/\/images.euronews.com\/articles\/stories\/09\/82\/21\/87\/1200x675_cmsv2_d3029938-f205-5cf7-a80e-ce602bdb5970-9822187.jpg&#8221;] Europe News Albanian police fire water cannon as Trump-linked protests boil over Destinations How to fly to Asia from Europe for less Europe News Brussels supports air conditioning\u2014but not as the main answer Europe News EU car industry clashes over strategy to fight Chinese competitors Europe News Albanian police fire water cannon [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[90],"tags":[226,36],"class_list":["post-2023120","post","type-post","status-publish","format-standard","hentry","category-international","tag-crawlmanager","tag-euronews-com"],"_links":{"self":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/posts\/2023120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2023120"}],"version-history":[{"count":0,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=\/wp\/v2\/posts\/2023120\/revisions"}],"wp:attachment":[{"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2023120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2023120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/analyse.optim.biz\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2023120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}