BERLIN – In a belated 2025 budget debate in the German parliament on Wednesday, Chancellor Friedrich Merz said that he plans to implement “bold reforms” but offered little detail.
The conservative chancellor promised an “autumn of reforms” to reinvigorate Europe’s largest economy, which is currently floundering through a third straight year without growth, in remarks to Germany’s parliament in Berlin on Wednesday.
“It’s about nothing less than the future of our country,” he said, vowing to deliver “bold reforms” that “should have begun long ago”.
Stagnation and job losses in key German sectors, particularly the chemicals and car industries, have raised fears of long-term economic decline for the country.
Merz promised to deliver far-reaching pension reforms, a more pragmatic and industry-friendly energy policy and welfare changes that will push more adults into the labour force as part of an autumn push.
While touting some smaller proposals that are already in the works – such as tax breaks for pensioners who keep working part-time – he only offered few details about key pieces of the major reform programme he promised.
Merz urged his Christian Democrat-Social Democrats coalition that has been in power since May to pull together in tackling the challenges ahead.
Last November, the previous German government fell, fighting over possible budget cuts. Merz’s comments on Wednesday came during debate over the 2025 budget, which has still not been approved.
On Tuesday, Brussels signed off on German plans for a historic debt-backed spending spree on outdated infrastructure and the long-neglected military. But recent economic forecasts cast doubt on whether it’ll be enough to get the German motor humming again.
Merz acknowledged that EU trade policy will be crucial for export-oriented Germany – and said he is pushing Brussels to consider German interests. On Tuesday, he defended the controversial EU-US trade deal as the best solution under the circumstances.
German companies are particularly vulnerable to US President Donald Trump’s trade wars and heavy tariffs slapped on European imports.
(vib)