Chancellor Merz attacks reform critics
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Pensions, health, care: Merz attacks his critics and is planning the most radical state restructuring since Agenda 2010. Is the Chancellor now doing Schröder?
Berlin – It was a spring day in March 2003 when Gerhard Schröder (SPD) entered the Bundestag to announce the largest social reform in German post-war history. The then Chancellor spoke for 85 minutes. Friedrich Merz (CDU), then leader of the CDU/CSU faction, sat on the opposition benches and didn’t miss an opportunity: “Desolation!” he shouted. “Now the cat is out of the bag!” and “So now more taxes.” The stenographic protocol, as reported by the Daily Mirroralso captured MP Merz’s laughter.
Today, more than two decades later, Merz praises Schröder’s Agenda 2010 – and tries a similar one himself. The difference: The former opposition politician is now head of government himself. This week, his coalition of CDU, CSU and SPD agreed on a total of 34 reform points that are intended to modernize Germany, stimulate the economy and make the welfare state future-proof. According to experts, there has not been a comparable restructuring of the welfare state in Germany since Schröder’s rapid-fire policy. So Merz is now turning himself into a great reform chancellor?
Pension, sick leave, taxes: Merz is planning a big hit – like Schröder once did
Whether Merz actually achieves his “agenda moment” with his social reform, as many observers comment, is at least in need of differentiation for political scientist Uwe Jun from the University of Trier. In an interview with the Frankfurter Rundschau from Ippen.Media he said: “That depends significantly on what is actually implemented in the end.” In other words: announcing alone is not enough. What is crucial for Merz is whether he actually gets the package agreed with the coalition through the Bundestag. But what is planned? Here is the overview:
- Steer: Increasing the basic and child allowance, higher child benefit, flattening income tax progression – relief volume around ten billion euros annually. A working family with two children and an annual income of 60,000 euros should save up to 600 euros per year. In future, the rich tax (45 percent) will apply to counter-financing from 250,000 euros, and from 280,000 euros it will rise to 47 percent.
Pension: Implementation of the recommendations of the Old Age Security Commission by the end of 2026 – the centerpiece is a state-managed capital fund based on the Swedish model as a new pillar of old-age provision.
Sick note: Abolition of telephone sick leave; Submission of a certificate of incapacity for work is mandatory from the first day of illness. There should also be further measures for health insurance and care. The commissions made their own suggestions here.
Basic security: The previous citizen’s benefit has already been replaced by a new basic security – with stricter obligations to cooperate and tougher sanctions for around 5.5 million benefit recipients.
Labor market: Fixed-term limitations on employment contracts without any objective reason will be extended to up to 48 months with the possibility of six extensions – doubling the previous regulation.
Reducing bureaucracy: Statutory reporting obligations are being lifted across the board; One in four documentation requirements should be abolished within one year.
According to Jun, the key difference to Agenda 2010 lies in the relationship between the state and personal responsibility: “Back then, people relied more heavily on personal responsibility. That may have been due to the times – liberal, some would say neoliberal, tendencies in economic and social policy were in vogue back then. That is no longer the case today. That’s why we see in the new resolutions that personal responsibility plays a smaller role and that the state should regulate more – even in retirement,” Jun told the FR.
“There are very good years ahead of us”: Merz praises his reform agenda – and deals it out against complainers
But the work still has to go through the Bundestag. Some members in the political groups have already expressed a significant need to speak. It cannot be ruled out that some points will be watered down in the parliamentary process. But Merz himself is demonstratively optimistic. At the state party conference of the North Rhine-Westphalia CDU in Düsseldorf, he said on Saturday, according to the news agency dpa: “Germany’s best years are not behind us. If we do it right, there are very good years ahead of us.” The coalition of CDU, CSU and SPD is a “real reform coalition for Germany” that proves that the political center can work out compromises and reform the country.
However, the comparison with Agenda 2010 is flawed at one crucial point, such as: Time already analyzed in September 2025: Schröder’s reforms were aimed at reducing labor costs and strengthening international competitiveness – a concept that worked because China’s accession to the World Trade Organization in 2001 triggered an export boom. Merz, on the other hand, has to reinvent the German business model under fundamentally different conditions: the Chinese have long been building their own cars, the Americans have been sealing off their markets with tariffs. In addition, there is a demographic crisis that is unique in the history of the republic.
At the time, Schröder had to contend with completely different resistance Daily Mirror analysed: union bosses insulted him as an “anti-social desperado”, IG Metall boss Jürgen Peters simply called the agenda “shit”, four SPD board members voted against the reforms. In the Federal Council, the Hartz laws initially failed because of the Union-led states – after tough negotiations in the mediation committee, the Union finally agreed on December 19, 2003. 581 votes, law. Schröder held out – and still lost: he was voted out in 2005.
Merz certainly wants to avoid this fate. At the weekend he entered the fight for his reform work. Merz did not leave criticism of the reform course uncommented at the CDU state party conference in Düsseldorf. With unusual sharpness he shouted: “Cultural pessimists, prophets of doom, complainers, complainers, outraged professional critics: step away! We go to work with confidence and optimism and we will bring our country back to the level to which we deserve it.” The tone is reminiscent of Schröder, who announced internally that there would be “crying and gnashing of teeth” – and yet still ruled in his famous “Basta” way.
Dare more Schröder: Junge Union called on Merz for more courage to reform months ago
Johannes Winkel, head of the Junge Union, had already demanded that Merz switch on this Schröder mode in November 2025. In an interview with Spiegel, Winkel said: “Schröder put his political career at risk with Agenda 2010. He did what Germany needed back then. We need this courage even more urgently now than then, because we will not only experience an economic crisis, but above all a demographic crisis.” The country not only needs the courage to reform, but also “a real passion for reform”.
Whether Merz now demonstrates this courage – and whether the reform package passes the Bundestag in its original form – will become clear in the parliamentary process. One thing is certain: there will be loud criticism from the opposition bench – but this time not from MP Merz. (Sources: Tagesspiegel, dpa, tageschau.de, Spiegel, Zeit, own research) (Jenko)