Merz defends his reform policy before the Bundestag and calls for embracing change

Merz presented the country with two options: to shy away from changes that initially involve restrictions, or to harness Germany's strengths and potential to turn the situation around in all the necessary areas. "Entweder wir scheuen Veränderungen, und zwar Veränderungen, die zunächst auch Einschränkungen bedeuten", he warned. The chancellor judged it urgent to act, stressing that industrial jobs are lost every day and that businesses are throwing in the towel in the face of high costs and bureaucratic burdens.

On pensions, Merz called to "Anreize setzen für längeres Arbeiten", that is, to put in place incentives to work longer. He also insisted on the need to reform the welfare system so that it remains sustainable, even if this must draw criticism: "die soziale Sicherheit in unserem Land so reformieren, dass sie tragfähig bleibt".

A large part of the speech devoted to domestic policy

A large part of the speech was devoted to domestic policy before turning to foreign policy. Merz assured Ukraine of Germany's continued support and advocated for renewed efforts to end the war. "Die Ukraine verteidige seit mehr als vier Jahren die Freiheit auch in Deutschland", he affirmed. He further stressed that Ukraine belongs to Europe and, in a longer-term perspective, to the European Union, and that it is defending the freedom and security of the entire continent.

The chancellor considered that a lasting peace could only be achieved through negotiations involving Ukraine, Russia, the United States and Europe: "Ein tragfähiger Frieden wird nur in Verhandlungen mit Beteiligung der Ukraine, mit Russland, der USA und Europa erreicht werden können, anders wird es nicht möglich sein." He specified that the Europeans intended to have a seat at the table in the event of new negotiations, even though the exact configuration remained uncertain. Merz is currently attempting, together with France and the United Kingdom, to revive the stalled efforts to end the war in Ukraine.

Support for Ukraine and the European outlook

Regarding the Atlantic Alliance, Merz stated that Germany was reinforcing NATO's eastern flank in response to Russia's apparent willingness to escalate, while supporting efforts in favour of a negotiated solution. He further reiterated, ahead of the European financial negotiations, his call for a fundamental modernisation of the EU budget in order to consolidate Europe as an independent power in a changing world. The chancellor clearly rejected the idea of new debt at European level.

The chancellor also attacked the AfD, accusing the party of mocking the plight of millions of people in Ukraine and of travelling to Moscow for champagne receptions: "Sie lachen darüber, über das Schicksal von Millionen Menschen in diesem Land, und reisen nach Moskau zu ihren Champagnerempfängen, gute Reise weiterhin." He called on politicians and all citizens to examine what each person could contribute to the success of the collective and to debate the issues constructively rather than with contempt: "was er zum Gelingen des Ganzen beitragen kann".

A launch meeting with the social partners

Ahead of the government declaration, the coalition leaders had met on Wednesday evening at the chancellery with the social partners — trade unions and employers' organisations — to launch the reform process. Merz described this lengthy meeting as constructive: "Dieses lange Gespräch hat in ausgesprochen guter, sehr konstruktiver Atmosphäre stattgefunden, und wir werden es zu einzelnen Themen auch weiter fortsetzen". The government spokesperson, Stefan Kornelius, specified: "Dazu wurden weitere Gespräche vereinbart".

Although the meeting did not produce concrete results, the participants nevertheless expressed optimism and assessed the exchanges as a success. "Konkrete Ergebnisse hat das Treffen von Regierungsmitgliedern und Vertretern der Arbeitnehmer und Gewerkschaften zwar nicht gebracht, als Erfolg gewertet wird es trotzdem", summarised Dennis Radtke (CDU), chairman of the Christian Democratic Employees' Association (CDA), in an interview on SWR Aktuell with host Christian Rönspies.

Radtke, however, qualified the lack of results. "Aktuell brauche es keine Zwischenergebnisse", he judged, adding that meetings were often laden with unnecessary significance and that there was no point in casting a negative eye on the absence of announced results. In his view, the essential thing was that the discussions had taken place: "Viel wichtiger sei es, dass überhaupt gesprochen wurde". He also stressed that communication was often the problem.

The chairman of the CDA demanded that civil servants and the super-rich also contribute to the effort: "Auch Beamte und Superreiche sollten ihren Beitrag leisten". For the necessary changes to win public acceptance, the social partners must be involved in the decisions: "Wenn das, was an Veränderungen notwendig ist, auf Akzeptanz in der Bevölkerung stoßen soll, dann wird es am Ende nur funktionieren, wenn die Sozialpartner bei den Entscheidungen auch mit am Tisch sitzen." He warned that the process would fail if it did not lead to genuine structural reforms but only to heavy austerity programmes borne mainly by statutory insured persons: "Wenn am Ende des Prozesses herauskommt, wir haben keine echten Strukturreformen, sondern in Wahrheit nur starke Einsparungsprogramme, die vor allen Dingen von gesetzlich Versicherten zu tragen sind (…) dann wird es nicht funktionieren".

Calls for "powerful" reforms from Veronika Grimm

On the scientific side, Veronika Grimm, member of the German Council of Economic Experts (Wirtschaftsweise), called for "wirkmächtige Reformen" and urged the federal government to take measures to foster growth. She regretted that reform debates often focus on ideas "die zwar gut klingen, aber am Ende nichts bringen" — that sound good but ultimately change nothing.

Grimm reiterated her call to raise the statutory retirement age and considered that the Mütterrente (mothers' pension) and the Rente mit 63 (pension at 63) should be reduced. She cited the debate on integrating civil servants (Beamte) into the general pension scheme as an example of a reform idea that would not produce financial relief: "Man hat zwar zusätzliche Beiträge, aber eben auch zusätzliche Ansprüche, die bezahlt werden müssten." She added that such an integration would also represent a significant administrative effort for the ministries.

On labour law, Grimm judged that German legislation on protection against dismissal was "deutlich zu restriktiv" and that taxes and contributions had to be reduced and regulations lightened. In her view, overly strict protection made risky projects unattractive for highly innovative companies: "Das macht es unattraktiv für hochinnovative Unternehmen, riskante Projekte voranzutreiben."

A united opposition in criticism

The opposition sharply criticised the government declaration. Alice Weidel, chairwoman of the AfD parliamentary group, described the speech as a "swan song of a failed man" and accused the chancellor of contempt for Germans, holding him responsible for deindustrialisation and a "tsunami of insolvencies". She claimed that the government was planning an increase in social contributions accompanied by cuts in benefits to finance the consequences of a "failed mass immigration".

Britta Haßelmann, chairwoman of the Greens parliamentary group, accused the chancellor of offending people every day: "jeden Tag stoßen sie diese Menschen vor den Kopf". In her view, the population feels cheated, because the cuts planned by the Union and the SPD always hit the same groups — social insurance contributors, people in need of care and their relatives, and above all women: "Die Leute fühlen sich verarscht". She regretted that under Merz, the word "reforms" had become "zu einem Synonym für Kürzungen verkommen", that is to say a synonym for cuts.

Sören Pellmann, chairman of the Die Linke parliamentary group, spoke of a policy of "social devastation" and denounced the fact that billions would be swallowed up in armaments companies while many benefits in health insurance, long-term care and pensions were being presented as unaffordable. He demanded that more money be invested in education, infrastructure, social cohesion and the future.

On the coalition side, Jens Spahn, chairman of the Union parliamentary group, stressed that the German government stood firmly alongside Ukraine, attacked by Russia, as well as alongside Israel in the war against Iran, regardless of the international criticism that this line drew. Matthias Miersch, chairman of the SPD parliamentary group, acknowledged that Germany faced