Merz Coalition Unveils 34-Measure 'Programme for Revival and Employment' After Marathon Talks

After roughly seven hours of coalition committee negotiations concluding July 1, Chancellor Friedrich Merz's CDU/CSU-SPD government publicly unveiled its 'Programme for Revival and Employment' on July 2 — a package of 34 measures billed as a breakthrough aimed at reviving Germany's stagnant economy and blunting the far-right AfD's rising poll numbers ahead of September's eastern state elections. The package includes roughly €10 billion in annual income tax relief for low- and middle-income earners, effective January 1, 2027 (still requiring Bundestag and Bundesrat approval); implementation of 33 pension-commission recommendations gradually raising the retirement age in line with life expectancy after 2031; tougher sick-leave rules requiring a doctor's note from the first day of absence rather than the fourth; expanded fixed-term contract options up to 48 months; longer permitted Sunday shop hours; and a reduction in corporate reporting bureaucracy. Finance Minister Lars Klingbeil (SPD) said high earners would 'take on a larger share of the tax burden' to help fund the relief. Merz said the government was 'doing everything we can to overcome our country's structural weakness,' framing the package as proof the coalition could still govern despite months of internal deadlock and record-low personal approval ratings.