Germany’s 34-Point Economic Package: Mandatory Doctor Visits, Looser Hiring Rules, and Higher Taxes for Top Earners
Veröffentlicht: 07.07.2026 um 15:45 Uhr, Redaktion boerse-global.de
A requirement for workers to obtain a medical certificate from the very first day of illness is generating the sharpest backlash in a broad 34-measure economic package that Germany’s coalition government adopted in early July. The “Program for an Upswing and Employment” spans labour law, tax policy and pension reform, but already critics from business associations and the medical profession are questioning whether the plans can be implemented in practice.
Sick Leave Overhaul Sparks Friction
The most contentious element abolishes the option of a telephone-based sick note. Instead, an official certificate of incapacity for work will be mandatory from day one. Chancellor Friedrich Merz defended the move, saying it is designed to cut the country’s sick-leave rate significantly. Yet resistance has emerged within the coalition itself: members of the CDU’s worker-wing and the SPD general secretary are calling for more flexible, collectively bargained alternatives at the company level.
The National Association of Statutory Health Insurance Physicians (KBV) has warned that the change could generate at least 30 million extra doctor’s office visits each year. Health Minister Warken plans to counter that surge by expanding digital services such as video consultations.
Dismissal Protection and Hiring Flexibility
Alongside the sick-note rules, the package introduces substantial changes to employment contracts. Fixed-term employment without a specific reason will be allowed for up to 48 months, with up to six renewals, a provision that runs until the end of 2030. From 2027, the written-form requirement for such contracts will also be scrapped.
High earners—those with an annual income starting at roughly €177,450—will face lower hurdles for dismissal, but only under new contracts signed from January 2027. The government is also creating tax incentives for severance payments. A researcher at the Institute for Employment Research (IAB) described the mechanism as a global novelty: the faster a dismissed employee finds a new job, the greater the tax break they receive.
Taxes and Pensions: Relief for Many, Higher Burden for the Wealthy
Several tax changes are set to take effect on 1 January 2027. The basic tax-free allowance, the child tax allowance, and child benefit will all rise, delivering annual relief worth roughly €10 billion. At the same time, the so-called wealth tax for top incomes will be tightened: incomes above €250,000 will be taxed at 45 percent, and those above €280,000 at 47 percent.
On pensions, the coalition is betting on a capital-funded component. More controversially, the retirement age will in future be linked to life expectancy—effectively pushing it beyond 67—and the option of a penalty-free pension after 45 contribution years will be eliminated.
Mixed Reception from Business, Unions, and Researchers
Employer associations have welcomed the moves to make the labour market more flexible, but the German Trade Union Federation (DGB) says the changes are creating growing insecurity among workers. The president of the Kiel Institute for the World Economy (IfW) called the package a political achievement but doubted it could act as a genuine growth engine, warning that tax relief could be eroded by inflation.
Funding questions are also looming. The 2027 budget draft already projects new borrowing of €200 billion, while cuts are planned to the child supplement and the Climate and Transformation Fund. Business representatives complain that structural problems, notably high payroll taxes, remain inadequately addressed.
