German coalition agrees on reform package in key breakthrough

German Chancellor Friedrich Merz said on Thursday that the nation’s ruling coalition has agreed on sweeping tax, labor and pension reforms. The reform package includes income tax cuts worth 10 billion euros, to be financed by higher taxes on those earning more than 250,000 euros a year.

Besides, changes to the pension system will eventually see the retirement age rise past 67. The coalition also agreed to reduce corporate reporting obligations that companies see as burdensome, and to scrap the right of employees with the aim of reducing worker absentee days in Germany.