Overview
- On July 2 the CDU‑SPD coalition agreed a 34‑point economic programme that bundles tax, pension and labour changes and sets out a timetable to seek parliamentary approval of core items by year‑end.
- The plan promises about €10 billion a year in tax relief for lower and middle incomes paid for by higher top rates for the richest, including a new 47% bracket for very high earners.
- Labour measures expand employer flexibility, such as longer fixed‑term hiring options and negotiated dismissal arrangements for top earners, and propose gradual pension changes that would raise the retirement age beyond 67.
- A headline provision ends telephone sick notes and restores a requirement for a medical certificate from the first day of illness, a change criticised by unions and GP associations as likely to overwhelm practices.
- Officials say the package aims to lift growth and blunt support for the far‑right AfD, while economists warn the tax cuts will be hard to sustain without curbing public spending and the measures must still clear parliament.