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Merz unveils sweeping reforms to boost German economy · INSIGHT TODAY

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  Speaker 1: Germany's coalition government has unveiled a sweeping package of pension,
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  Speaker 1: tax and labor reforms, along with measures to cut red tape.
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  Speaker 1: Chancellor Friedrich math says they are designed to boost growth,
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  Speaker 1: jobs and competitiveness while maintaining social welfare protections.
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  Speaker 2: The new reform package was a long time coming, and
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  Speaker 2: presenting it to the public, Chancellor Fritch Maertz made it's
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  Speaker 2: gold clear.
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  Speaker 3: We are working to increase competition, enhance the flexibility of
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  Speaker 3: our businesses, reduce bureaucracy, preserve our welfare state and ease
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  Speaker 3: the burden on workers and businesses by lowering taxes and
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  Speaker 3: cutting red tape.
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  Speaker 1: Zenken ont the bureaucate stone.
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  Speaker 2: The coalition government is facing increasing pressure to take steps
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  Speaker 2: to revive Europe's largest economy, and they believe they've found
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  Speaker 2: a plan to do so. Among the proposed changes is
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  Speaker 2: a gradual increase in the retirement age over the coming decades,
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  Speaker 2: along with the introduction of a capital markets based element
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  Speaker 2: to the state pension system. Tax relief for working families
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  Speaker 2: with children and middle income households to be funded by
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  Speaker 2: raising the top rate of tax for the country's highest earners.
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  Speaker 2: New rules for companies offering fixed term contracts for up
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  Speaker 2: to forty eight months, along with greater freedom for dismissal
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  Speaker 2: with compensation agreements. Support for key industries including the automotive,
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  Speaker 2: chemicals and pharmaceuticals, clean technology, machinery and artificial intelligence, and
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  Speaker 2: support for European Union anti dumping and anti subsidiary measures,
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  Speaker 2: along with promoting key trading partnerships within the EU. The
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  Speaker 2: coalition between Mounts center right Conservatives and the center left
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  Speaker 2: Social Democrats had been struggling for months to agree on
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  Speaker 2: a number of thorny issues, but now it's settled. Chancellor May,
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  Speaker 2: it's appealed to the public to help make the plan
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  Speaker 2: a success.
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  Speaker 3: Listen, Z, we know that you, ladies and gentlemen, the
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  Speaker 3: citizens of our country want decisions and do not want conflict,
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  Speaker 3: and that's exactly what we've delivered. But we also have
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  Speaker 3: a request join us, support us and the reforms that
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  Speaker 3: are now necessary.
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  Speaker 2: Parliament is expected to pass the individual measures and the
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  Speaker 2: package by the end of the year.
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  Speaker 1: Political correspondent time In Young joins us, Now, what are
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  Speaker 1: the big structural ideas behind this reform package and does
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  Speaker 1: it match the scale of Germany's economic problems?
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  Speaker 2: Well?
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  Speaker 4: Sarah you know, one big thing is that this is
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  Speaker 4: one of the most popular unpopular governments that there's ever been,
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  Speaker 4: so they need to come up with something big to
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  Speaker 4: change that. The offer to the voters here is that
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  Speaker 4: they're going to ease income tax for many ordinary tax payers,
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  Speaker 4: and on the other side, they're going to ease make
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  Speaker 4: life easier for businesses, especially with the deregulation, removing rules
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  Speaker 4: and so on. So the big idea is to address
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  Speaker 4: the lack of competitiveness and growth that Germany's economy has
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  Speaker 4: been suffering from for many years. And many economists say
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  Speaker 4: that this is a step in the right direction, that
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  Speaker 4: it will make a difference, but of course that'll depend
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  Speaker 4: on implementation.
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  Speaker 1: But I mean Matz for his part, he says that
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  Speaker 1: this is about boosting growth and competitivesiness. But to your point,
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  Speaker 1: do these measures meaningfully address Germany's long standing issues and
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  Speaker 1: I'm talking about low productivity, hy bureaucracy, sluggish investment.
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  Speaker 4: Yeah. Well, I mean, if you look at a measure,
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  Speaker 4: are like doubling the length of time that an employer
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  Speaker 4: can keep somebody an employee in a short term contract
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  Speaker 4: as opposed to offering them the benefits of a full
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  Speaker 4: contract then doubling that length of time that should possibly
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  Speaker 4: attract some investment, particularly in startup companies in sectors like
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  Speaker 4: you know, technology, which the government is keen to promote,
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  Speaker 4: or if you look at easing the planning process and
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  Speaker 4: making that easier to put through. Those are the sort
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  Speaker 4: of things that businesses say they want, and at least
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  Speaker 4: one economist is forecasting that this whole package could double
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  Speaker 4: Germany's growth in the coming years.
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  Speaker 1: How fragile is the coalition's unity behind the package, given
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  Speaker 1: how long they struggle to agree on the reforms.
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  Speaker 4: Well, I think there's definitely pain here, especially for the
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  Speaker 4: Social Democrats, the left leaning part of the government. You know,
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  Speaker 4: I talked about the removal of some protections for workers,
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  Speaker 4: particularly at the start of their career, or for instance,
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  Speaker 4: making it more difficult to claim sickly. I'm sure that's
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  Speaker 4: something that's already generating a certain amount of pushback from people.
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  Speaker 4: And you know, this is being signed off by the
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  Speaker 4: Social Democrats, a party that's always seen itself as the
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  Speaker 4: protector of workers, as it were. And on the other side,
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  Speaker 4: you've got measures like raising the top rate of income
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  Speaker 4: tax for top earners to forty seven percent, I don't
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  Speaker 4: suppose that will boost support for Chancellor Metz's center right parties.
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  Speaker 4: So there are hard pills to swallow, you know, for
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  Speaker 4: both parties, and it will be a question, it'll be
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  Speaker 4: a test, I think for the leaderships on both sides
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  Speaker 4: to make sure they keep their parties together and avoid
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  Speaker 4: sort of revolt from the rank and file.
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  Speaker 1: Simon Young, thank you.