Merz Vows Step-by-Step Reforms as Germany Lags on Economic Goals
“The need for structural reforms is great,” Merz said during a meeting in Berlin with business representatives from the “Made for Germany” initiative.
The federal government has launched a number of initiatives, he conceded, but they have not yet reached the stage the coalition had hoped for by now.
Merz said no one should doubt “my determination” to keep implementing reforms step by step, according to a German press agency.
He pointed to efforts to make the labor market more flexible as one example.
“We have some catching up to do there,” he said. He added that the issue will be taken up next week in the coalition committee and that a whole series of labor market laws must still follow.
The chancellor also highlighted the deepening of the EU single market and the planned pension reform in Germany.
The pension overhaul remains contentious inside the coalition. Merz's junior partner, the Social Democratic Party (SPD), wants to discuss the planned abolition of the full pension after 45 years of contributions. Measures to loosen up the labor market are also disputed.
Merz noted that economic research institutes have raised their forecasts for this year, driven largely by billions in government investment in infrastructure modernization through a debt-financed special fund. Even so, he said, there is not yet a self-sustaining economic upswing for the coming years.
He stressed that Germany has major opportunities in artificial intelligence (AI), while urging smaller firms to act.
“Small and medium-sized enterprises in Germany must make better use of their data,” he said.
If these businesses tap into that treasure trove of data, Germany will hold one of the greatest competitive advantages in the world, he said, adding that no other country has such a diverse and deeply stratified industrial small and medium business sector.
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