Friedrich Merz, the new Chancellor of Germany, played his difficult hand brilliantly. With that potential come enormous expectations, not least of which is the successful passage of a key pension reform package. This significant achievement comes during the first seven months of his administration, which has been marked by public debates and challenges in maintaining coalition unity.
To pass the pension reform package, the plan’s approval needed an absolute majority among the 630 lawmakers of the house. Merz was a passionate proponent of this legislation. It includes provisions to protect the pension’s value and provides tax incentives to keep retirees in the labor market. His coalition partners, the pro-market, center-left Social Democrats, were key to supporting these reforms. This time, they reached past old tensions in the coalition to deliver their backing.
Since taking office in May, Merz’s government has faced the perfect storm of challenges. Of particular significance, support for the far-right Alternative für Deutschland party (AfD) has skyrocketed. Critics contend that the coalition has “too many public conversations.” They say this approach makes serious governance impossible. Merz wanted to avoid the infighting that had derailed Olaf Scholz’s government before it had a chance to form. He has achieved substantial gains in building goodwill among his junior partners.
In July, Merz supported a center-left nominee to Germany’s highest court, driving home his dedication to cross-partisan collaboration. His priorities still lie with reviving Germany’s sluggish economic growth and sorting out the mess with irregular migration. Coalition leaders are turning up the heat. They announced their plans for a commission to propose even more far-reaching reforms to the pension system by mid-2026.
Merz’s path to the chancellorship was hardly a cakewalk. It took him two rounds of voting in parliament to finally lock down his place in May. Given these hurdles, the recent passage of the pension reform package represents a significant victory for his administration. Undoubtedly, the government acted in advance to prevent any such future embarrassment. Most importantly, they made sure these measures passed by not counting on the opposition Left Party’s abstentions alone.
