Merz Urges Germany To Tackle Structural Reforms Amid Growing Economic Challenges
Germany Faces Calls for Reform Amid Economic and Political Pressures
By Holger Hansen and Matthias Williams
Chancellor Merz's Warning and Public Reaction
BERLIN, May 12 (Reuters) - Chancellor Friedrich Merz said Germany must "pull itself together" or risk being left behind in a rapidly changing world, in a speech to trade unionists on Tuesday that sparked jeers, whistles and boos.
Declining Popularity and Government Disputes
After a year in office, Merz's popularity has sunk and his government has become embroiled in disputes over how far and how fast to reform Europe's largest economy to revive growth and tackle ballooning healthcare and pension costs.
Political Climate and Far-Right Surge
The sceptical reception among delegates representing workers from across industrial, public and service sectors reflects a wider battle in German politics over the pace of change at a time when established parties are losing votes to the surging far-right Alternative for Germany (AfD).
Coalition Talks and Economic Recovery
Coalition Stability and Leadership Response
Merz's conservatives and their junior ally, the Social Democrats, were meeting later on Tuesday to thrash out differences, with Merz and his Vice Chancellor Lars Klingbeil batting away suggestions that the coalition could collapse.
Economic Headwinds and Recovery Risks
After two years of recession, Germany returned to growth at the end of last year but the fragile recovery risks being snuffed out by an energy shock from the war with Iran and new U.S. tariffs targeting carmakers that are already struggling against competition from China.
Structural Problems and Calls for Modernisation
Merz's Critique of Past Policies
"The challenges are also so great because we have created problems for ourselves for far too long, problems that we now have to solve. We have simply failed to modernise our country," Merz told the German Trade Union Confederation.
Urgency for Structural Reforms
"Germany must therefore pull itself together. Germany must tackle the structural problems that we have been putting off for many years, problems that have consequently grown steadily larger. You know it, we all know it."
Business Concerns and Audience Response
Merz said high costs and bureaucracy were hurting business, putting jobs and the prosperity of future generations at risk.
But his case for reforming health and pensions, the latter a straightforward question of "demographics and mathematics", was greeted with periodic heckling, whistles and laughter, while some in the audience held thumbs-down signs.
(Writing by Matthias Williams; Editing by Kevin Liffey)
