This change of course is right

German Employers’ President Dr Rainer Dulger on the Federal Government’s reform package:

This change of course is right

Berlin, 2 July 2026. “With its reform package, the coalition has embarked on a long‑overdue change of course. The shift towards growth and employment is an important message of the package – and it builds confidence. This change of direction must now develop into a genuine economic turnaround.

A number of measures strengthen the competitiveness of Germany as a business location, stabilise the social security systems, and help to reduce red tape as well as modernise the state. For the first time in decades, extending fixed-term employment without objective reason introduces greater flexibility into labour law. By abolishing the telephone-based sick note and requiring a medical certificate from the first day, the coalition is rightly responding to the comparatively high level of absenteeism due to illness. Our employees will welcome the increase in the income tax basic allowance.

However, a change of course is only the beginning. It does not mean that we have reached our goal. What matters is that this new direction is now pursued consistently. The objective of price competitiveness has not yet been achieved. Social security contributions remain too high. The agreed introduction of a weekly maximum working time has not yet been implemented. There is no sign of relief for high earners.

If, however, the coalition continues to take the next steps in line with this new course, it would send a positive signal for Germany as a business location. Now is not the time for anyone to apply the brakes.”