Chancellor Friedrich Merz told an audience at the Chambers of Commerce and Industry in Berlin on Thursday that Germany faces its gravest economic challenge since the Second World War, urging citizens and companies to be patient as his black-red coalition pursues tax, welfare and health reforms.
Speaking on the first anniversary of his swearing-in, Mr Merz said the country had entered a "phase of profound transformation" driven by deindustrialisation pressures, energy costs and demographic strain. He pledged to push his agenda through despite weeks of public wrangling with the centre-left Social Democrats.
The chancellor explicitly rejected speculation that he might call snap elections or accept a minority government, telling delegates that "no one should dream of either" outcome. His coalition partners have publicly criticised parts of the welfare package, particularly proposed restrictions on early-retirement benefits.
Approval ratings for Mr Merz's government have fallen to the low thirties in recent polling. The far-right Alternative for Germany now polls within striking distance of the chancellor's Christian Democratic Union nationwide and leads in several eastern states.
Industry leaders gave the speech a mixed reception. The head of the BDI federation of German industries earlier called the coalition unreliable. Bloomberg quoted business chiefs saying that core priorities — accelerated permitting, lower power prices, defence procurement reform — had moved too slowly.
Mr Merz said major energy projects, including new gas-to-power plants and grid upgrades, would be brought forward under emergency procedures this summer, and that a long-delayed corporate-tax reform would be tabled before the parliamentary recess.