German Chancellor Friedrich Merz unveiled a 34-point plan to revive Germany’s economy, including controversial plans to crack down on sick leave.
Germany’s economy has faltered in recent years, and the global energy crisis from the Iran war worsened the situation after a brief respite last year. After late-night negotiations Wednesday, Germany’s ruling Christian Democratic Union-Social Democrat coalition reached a deal on the economic reform platform. Among the most notable reforms were stimulus packages for strategic industries, slight tax hikes for the ultrawealthy, tax cuts for working families, and, controversially, an end to sick leave via phone.
“These reforms all have one goal: We’re setting out into the future,” Merz said. “We’re strengthening ourselves so that we can live well in these new times.”
“From the very beginning, we set an agenda with a single goal in mind: We want to get Germany back on track. It is now clear that this is possible,” he added.
The proposal that raised the most eyebrows was the crackdown on sick leave. Facing concerns that Germans were abusing the easy way in which employees could call off sick, Merz announced that those seeking to call off sick would now require a doctor’s note rather than a simple phone call, which he said had been abused following the COVID-19 pandemic.
“We can no longer accept the extraordinarily high levels of sick leave in our companies,” Merz said. “We are abolishing sick leave by telephone and introducing the requirement to submit a medical certificate from the very first day of illness.”
“We know this is a tough decision. But we can no longer afford this competitive disadvantage caused by prolonged absences from work,” he added.
The high rates of sick leave have been a constant complaint for the CDU, but its SPD coalition partners have previously pushed against attempts to crack down.
The reforms also targeted Germany’s pension system, perhaps the biggest resource consumer in the country. The retirement age will be gradually raised over the ensuing decades, from its current position at 65 to 67, depending on years worked.
The reform package was bound to provoke critics, both on the Left and Right. The right-wing Alternative fur Deutschland Party was quick to criticize the move, portraying it as caving to the Left.
“Another broken CDU election promise, even more left-wing redistribution & minimal compromises that don’t deserve the name ‘reform.’ The fact that this is being sold as a ‘breakthrough’ shows just one thing: the government’s complete inability to reform,” AfD co-leader Alice Weidel said in a post on X.
Germany, the economic powerhouse of Europe as recently as the last decade, is embroiled in economic crisis over crippling issues from several angles, including the sudden end of its reliance on cheap Russian gas, an aging population, turbulent trade relations with the United States, the rise of China, and, most recently, energy price spikes.