German coalition agrees on sweeping reform package in key breakthrough

submitted by Powderhorn to news 3 points | 0 comments https://www.aljazeera.com/news/2026/7/2/german-coalition-agrees-on-sweeping-reform-package-in-key-breakthrough > German Chancellor Friedrich Merz’s ruling coalition has unveiled a sweeping package of tax, labour and pension reforms aimed at reviving Europe’s largest economy and countering a surge by the far right. > > The “Programme for Revival and Employment” announced on Thursday includes about 10 billion euros ($11.4bn) in annual income tax relief targeted at lower and middle-income earners, taking effect from January 1, 2027. > > The 34 reform measures also include an overhaul of the creaking pension system, tougher rules for employees’ sick leave and a reduction of the country’s stifling bureaucracy. > > The tax relief is to be financed primarily by restructuring the surcharge on top incomes. “The highest earners in this country will therefore take on a larger share” of the tax burden, said Finance Minister and Vice Chancellor Lars Klingbeil of the centre-left SPD. “That is fair, so that our country can move forward.” It’s so weird to hear politicians make sense at the Cabinet level.