German Chancellor Friedrich Merz has unveiled a sweeping reform package, including stricter sick leave rules for employees, as part of efforts to strengthen Germany’s sluggish economy. 

Mr Merz had repeatedly complained that the rate of sick leave was too high in Germany and it’s harming the country’s productivity.

The leave policy is one of the 34 measures announced on Thursday, which would require employees to provide a doctor’s certificate from the first day of illness instead of COVID-19 pandemic-era policy of fourth day at present, an effort aimed at reducing absenteeism at work. 

“These reforms all have one goal: We’re setting out into the future. We’re strengthening ourselves so that we can live well in these new times.From the very beginning, we set an agenda with a single goal in mind: We want to get Germany back on track. It is now clear that this is possible,” the chancellor said.

Other proposals in the reform package include income tax cuts to low and middle income families, extending retirement age beyond 67 years, overhaul of the creaking pension system and a reduction of the country’s stifling bureaucracy.

The tax relief for low and middle income households is estimated to be worth $11.4 billion annually, lifting some financial burden on workers, with the government targeting January 1, 2027 as implementation date. 

The measures, however, still need to go through the Bundestag, Germany’s lower house of parliament for approval, while the income tax cut will also require the consent of the Bundesrat, the upper chamber.

Meanwhile, the opposition Alternative for Germany party, which finished second in the national election last year, said the projections could derail the reforms.

“The fact that this is being sold as a ‘breakthrough’ shows only one thing: this government’s complete inability to reform,” the party’s co-leader Alice Weidel wrote on X, calling the measures an “even more left-wing redistribution, and minimal compromises that don’t deserve to be called ‘reforms’.”