Germany issues rule changes as it’s crippled by sick workers | World | News

Germany is set to overhaul its sick leave system after Chancellor Friedrich Merz announced plans to scrap telephone sick calls and require workers to provide a medical certificate from the first day they are sick.

The changes form part of a wide-ranging economic reform package aimed at boosting productivity and helping revive Europe’s largest economy, which is struggling with slow growth, rising energy costs and increasing international competition.

Announcing the reforms, Mr Merz said Germany could no longer tolerate the country’s high levels of sickness absence.

“We can no longer accept the extraordinarily high levels of sick leave in our companies,” he said.

“We are abolishing telephone sick leave and introducing the obligation to submit a medical report from the first day of the illness.

“We know this is a difficult decision. But we can no longer afford this competitive disadvantage caused by long-term absences.”

The reforms come as economists and employers voice concerns that long-term sick leave is having a negative impact on Germany’s economic performance.

As well as changes to sick leave, the coalition government has unveiled a package of measures that includes a €10 billion annual tax cut for low-income earners, plans to build more affordable housing, tougher measures against benefit fraud and an 8% reduction in staff numbers in federal ministries through digitalization.

The tax cuts will be partly financed by increasing the top income tax rate from 45% to 47% for those earning €280,000 or more each year.

The government also plans to make it easier for businesses to hire workers on fixed-term contracts as part of efforts to reduce red tape and increase labor market flexibility.

Mr Merz said the reforms were necessary to restore Germany’s competitiveness.

“We want to get Germany back on track,” he told reporters.

Economists generally welcomed the announcement, after months of disagreements within the ruling coalition.

Carsten Brzeski, ING’s global head of macro, described the package as an important milestone.

“There are no brakes on the reform train… This is an important package designed to strengthen Germany as a business hub in the long term and put public finances on a sustainable basis,” he said.

“One says ‘Finally!’ He starts shouting. It took a year, but the ‘summer of reform’ has arrived.”

Employers’ Association president Rainer Dulger also welcomed what he called “a long overdue change of course”.

But the reforms have come under criticism from unions and medical experts.

Christiane Benner, president of Germany’s largest trade union IG Metall, welcomed the tax cuts but said expanding the use of fixed-term contracts amounted to an “attack on workers’ rights”.

Meanwhile, Markus Blumenthal-Beier, president of the German Association of General Practitioners, warned that requiring employees to obtain a doctor’s certificate from the first day of illness would put additional pressure on family doctors.

He described the proposal as “absolutely catastrophic”, arguing it would clog up Germany’s healthcare system.

The reforms also include plans to overhaul Germany’s pension system. A government-appointed commission has recommended creating a Swedish-style pension fund and gradually increasing the retirement age as the country’s population continues to age.

The government has said it plans to pass pension reforms before the end of the year as part of one of the country’s biggest economic reform packages in decades.