“The economy is facing significant strains, as reflected in our recent decisions,” stated SPD Labor Minister Bärbel Bas during a Thursday morning news conference in Berlin. “We urgently need solutions, and we’re committed to supporting employees and safeguarding jobs in our country.”
In August, the unemployment figure rose to 3.02 million, marking the highest in ten years. Major manufacturing firms that once fueled the economic boom are cutting jobs, including key national companies like engineering giant Robert Bosch, which announced plans to reduce 13,000 jobs by 2030, automaker Volkswagen, and the country’s second-largest bank, Commerzbank.
Efforts to stabilize the economy and secure employment involve offering financial incentives for retirees to remain in the workforce and implementing stricter regulations for long-term unemployment benefit recipients.
Merz highlighted the “really great working atmosphere” among negotiators, promising swift action on the measures. He mentioned that Cabinet would approve the incentives for retirees next week, and the legislative process for unemployment system reform would start immediately.
This issue is particularly significant for Merz’s coalition partner, the SPD, known for their strong support of Germany’s robust welfare state and workers’ rights.
According to the agreement, long-term unemployment benefits will be cut by 30% if a recipient misses two consecutive meetings at the employment office, leading to complete benefit loss after a third missed appointment.
“If 100,000 more people find work as incentives make employment more rewarding than unemployment, we anticipate saving around €1 billion. That’s our objective,” said Bas, co-chair of the SPD.
“Our shared aim is to encourage employment, leading to substantial savings,” she concluded.
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