Germany’s coalition leaders convene to negotiate sweeping reforms on taxes, labor, and social systems.

Top representatives from Germany’s governing coalition, including Chancellor Friedrich Merz, CSU leader Markus Söder, and SPD chairs Lars Klingbeil and Bärbel Bas, have begun discussions at the Chancellery aimed at advancing a significant reform package. The agenda includes income tax changes, labor market adjustments, and social system reforms. Merz expressed optimism, stating, ‘My expectation is that we will make a significant leap forward in modernizing our country.’

The talks come amid high expectations from industry leaders and unions. Tanja Gönner, head of the Federation of German Industries, urged swift action, citing the seriousness of the economic situation. Meanwhile, DGB chair Yasmin Fahimi criticized the government’s pension plans, calling for a broader debate on wealth distribution. Despite the complexity of the negotiations, Merz hinted at potential early results, though he ruled out a ‘big bang’ solution.