Economic reform: German workers will no longer be able to call in sick
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Germany’s ruling coalition has agreed on sweeping tax, labour and pension reforms, including scrapping the right to obtain sick notes by telephone to reduce worker absenteeism in the country. “We are working to increase the flexibility of our businesses,” Chancellor Friedrich Merz said Thursday during a press conference in Berlin after lengthy talks between his centre-right CDU/CSU alliance and their coalition partners, the centre-left SPD. “We are working to cut red tape. We are working to protect our welfare state, and we are working to ease the burden on employees and companies by lowering taxes,” said Merz, who had promised a “great leap forward” for German growth. The package includes income tax cuts worth 10 billion euros ($11.4bn), to be financed by higher taxes on those earning more than 250,000 euros a year. And changes to the pension system will eventually see the retirement age rise past 67. “The highest earners in this country will take on a larger share” of the tax burden, said Finance Minister and Vice Chancellor Lars Klingbeil of the SPD. “That is fair, so that our country can move forward.” The tax relief would mean an average family is about 600 euros better off per year, the parties said. The coalition also agreed to reduce corporate reporting obligations that companies see as burdensome. It will also be possible to employ people on temporary contracts for up to four years. Business organisations welcomed the plans, but trade union IG Metall said the labour reforms were “an attack on workers’ rights”. ‘Under pressure’ The coalition parties — in power since May last year in Europe’s biggest economy — had been struggling for months to agree on a series of thorny issues. The government is also keen to show it can get to grips with the country’s problems and to diminish the appeal of the far-right Alternative for Germany (AfD), which has been topping national opinion polls for months. Key regional elections will be held in September in formerly communi