Overview
- The ruling coalition announced the 34-point package on Thursday, July 2, combining roughly €10 billion a year in tax relief for lower- and middle-income households with higher top tax rates to finance the cuts.
- A central labour change removes pandemic-era telephone sick notes and requires employees to present a doctor’s medical certificate from the first day of illness, a move the government says will cut absenteeism.
- The reforms also include pension changes recommended by a government commission that would gradually raise the retirement age beyond 67 and explore a Swedish-style pension fund model.
- Business groups and some economists welcomed the agreement as a long-awaited push to boost growth while unions and medical associations warned the sick-leave rule will overload GPs and harm workers, with unions calling parts of the package an attack on rights.
- The government plans to table core bills for parliamentary approval by the end of the year, with regional elections in September adding political urgency to deliver visible results and blunt support for the AfD.