Germany’s coalition leaders finalize key reforms on income tax and economic growth.

The leaders of Germany’s CDU, CSU, and SPD parties have reached an agreement on a comprehensive package of reforms, including income tax adjustments and measures to boost economic growth and employment. The coalition committee, which met for eight hours on Wednesday, will present the details during a press conference scheduled for Thursday morning at 9 AM.

Chancellor Friedrich Merz emphasized the importance of enhancing Germany’s competitiveness, enabling households to spend and industries to invest. However, debates over funding mechanisms, such as increasing taxes on high earners, remain contentious. The SPD supports higher taxes on the wealthy, while the CDU opposes such measures. Additionally, plans to shift from daily to weekly working hour limits have sparked criticism from labor unions, who view it as a threat to workers’ rights.