Merz says government will not be deterred from its economic course

Merz's remarks come at a moment of sustained pressure on Germany's economic model. The country's industrial output has lagged behind peers in recent quarters, and energy costs, demographic shifts and global trade frictions have all weighed on the outlook. By making the economy the centerpiece of the cabinet meeting, Merz is signaling that fiscal and competitiveness measures will dominate the government's near-term agenda rather than social or cultural reform proposals.

Why the economy is back at the center

A key theme of the cabinet discussions is expected to be the reduction of bureaucratic burdens on businesses. Ministers are reviewing planned legislation to cut reporting obligations and accelerate approval procedures, particularly for mid-sized companies that form the backbone of the German economy. Officials familiar with the talks said the package could be rolled out in stages, with the first measures presented before the autumn budget cycle.

Energy policy is also high on the agenda. With wholesale electricity prices in Germany remaining above the European average, the government is weighing adjustments to grid fees and subsidy frameworks to relieve heavy industry. Merz has previously argued that cheaper, more reliable energy is a precondition for bringing production back home and for keeping globally competitive firms from relocating abroad.

Coalition management and the opposition

The chancellor's emphasis on economic renewal sits alongside an active diplomatic calendar. Recent weeks have seen German delegations travel to Canada and to countries in the Western Balkans, and trade discussions with Italy and other European partners remain ongoing. Officials say the economic agenda is intended to dovetail with those foreign-policy efforts, presenting Germany as a predictable place to invest at a time of geopolitical uncertainty.

Inside the coalition, the priority on the economy is also a means of managing tensions between the CDU/CSU and the SPD. The two partners disagree on tax policy and on the pace of social spending reform, but both sides have publicly endorsed a competitiveness push as a common objective. Merz used his appearance to underline that unity of purpose, repeating his line that the government "will not be deterred" from its plans.

The opposition has been less convinced. Lawmakers from the Greens and the Left have argued that the government's economic strategy lacks new instruments and relies too heavily on rhetoric rather than fresh investment. They point to slow progress on the planned corporate-tax reform and to continued friction between Berlin and the European Commission over budget rules. Merz did not address those critiques directly in his Sunday remarks.

Looking ahead, the cabinet is expected to finalize a list of "growth initiatives" in the coming weeks, which could include a revised depreciation schedule for business investment, additional support for start-ups, and new rules to attract skilled workers from outside the European Union. Whether those measures will be enough to shift Germany's growth trajectory is the question investors and European partners will be watching in the months ahead.