What changed
2026-08-03 10:14 UTC → 2026-08-03 11:29 UTC ·
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After a marathon 7½‑hour session on 1 July, In July 2026 the Union‑SPD coalition approved a sweeping reform package that combines tax changes, tighter labour‑market rules, pension reforms and SPD parliamentary group leader Matthias Miersch sent a cut letter to bureaucracy. Key measures include ending the early‑retirement benefit “Rente mit 63”, raising Bundestag members defending the black‑red coalition’s reform programme. He highlighted €18 billion in planned savings for statutory retirement age step‑wise toward 70 by the early 2030s, and extending fixed‑term contracts to 48 months with six renewals. The plan also raises top‑income tax rates, introduces a wealth‑tax element health insurance and removes cited recent measures such as the solidarity surcharge. President Frank‑Walter Steinmeier warned re‑introduction of compulsory military service, a “genuine crisis”, while Chancellor Friedrich Merz called “building‑turbo” for affordable housing, the deal a “big leap forward”. The reforms have sparked intense political backlash. The Bündnis Sahra Wagenknecht (BSW) highlighted a sharp rise in retirees on basic security, especially in Saxony, Saxony‑Anhalt Tariff‑Reliability Act and Thuringia, arguing the changes will hit eastern Germans hardest. CSU leader Markus Söder’s proposal to increase Minijob contributions drew criticism from SPD co‑leader Lars Klingbeil, who a socially‑targeted e‑car scheme. Miersch warned that dismantling any part of job losses. A new poll shows the AfD leading at 29‑30 %, ahead of package would destabilise the Union whole effort and Greens, while the SPD slipped to double‑digit support. FDP chairman Wolfgang Kubicki, campaigning in Saxony‑Anhalt, labelled called for coalition solidarity. Saxony’s Minister‑President Michael Kretschmer (CDU) responded that the tax‑reform component a “catastrophe” reforms are only “first steps” and vowed to restore the party by May 2027. In urged the run‑up government to the September Sachsen‑Anhalt election, the CDU adopt deeper measures on energy, climate policy and FDP ruled out any coalition with the AfD or the Left, even as the AfD polls around 40 %. fiscal competitiveness to restore export strength. DIW president Marcel Fratzscher reiterated that scrapping abolishing the early‑retirement scheme “Rente mit 63” is the financially essential, decisive element, estimating roughly €10 billion in long‑term savings and about 125 000 additional jobs per retiree cohort. Union leaders and He warned that without the SPD’s measure the pension reform would collapse. Chancellor Friedrich Merz and Labour Minister Bärbel Bas defend pledged to implement the package as a comprehensive “Gesamtkunstwerk”, Rentenkommission’s recommendation, while Union leaders Thorsten Frei and Franziska Hoppermann backed the abolition. CSU leader Markus Söder opposed reopening the scheme, and three eastern CDU ministers publicly oppose defended it, prompting criticism from SPD figures such as Manuela Schwesig. In Rhineland‑Palatinate, Minister‑President Gordon Schnieder (CDU) was criticised after former SPD state secretary Dr Stephan Weinberg received a five‑year “Sonderurlaub” that counts as pension‑eligible service, projected to raise his pension by €1.5‑1.7 million. Opposition parties and the early‑retirement abolition. Taxpayers’ Association accused Schnieder of breaking his campaign promise to end the practice.