“It’s commendable that the federal government is tackling problems that have been left unaddressed for decades, but can all of this be accomplished at once?” Andreas Bovenschulte, the Social Democratic Party (SPD) mayor of Bremen, told German magazine Spiegel. “Tax reform, healthcare reform, long-term care, pensions, labor, energy — to put it mildly, that seems a bit much” to accomplish before the summer break.
The other problem for Merz is that many of the reforms would be politically difficult even for a popular and ideologically-united government. Making the pension system more sustainable, for instance, will require proposals to increase retirement ages and lower benefit payments, policies certain to anger much of the electorate.
But Merz doesn’t have a great amount of political capital to spend. So far, the coalition has largely avoided public confrontation over some of the most politically explosive issues, including the pension reform, by outsourcing initial proposals to expert commissions.
But with key recommendations due later this month, the ideological divide between the SPD — a traditional workers’ party likely to defend state pension guarantees — and Merz’s conservatives — who favor a major expansion of private pensions linked to capital market investments — is likely to come into sharper focus.
Still, SPD leaders say compromise is necessary to reassure German voters that the government can function effectively.
“Good governance builds trust,” Sebastian Roloff, an SPD lawmaker, told POLITICO. “If people initially feel that politicians are working seriously on reforms — albeit amid critical debate — and then, over time, they also feel and see the positive consequences of these reforms, it will at least become more difficult for fringe groups to discredit existing political structures.”