Fitch Backs Germany Reform Package, Sees Only Limited Growth Impact
Updated
Updated · Bloomberg · Jul 9
Fitch Backs Germany Reform Package, Sees Only Limited Growth Impact
3 articles · Updated · Bloomberg · Jul 9
Summary
Fitch Ratings called Germany’s new reform package a step in the right direction, but said it is unlikely to materially change the economy’s weak trajectory.
Measures approved by Chancellor Friedrich Merz’s coalition include changes to the pension system and health insurance, which Fitch described as positive but modest in their likely effect on growth.
The package follows labor-market proposals unveiled a day earlier, including looser dismissal protection for top earners, fixed-term contracts of up to 48 months and other rules aimed at boosting jobs from Jan. 1, 2027.
Fitch’s assessment underscores the broader challenge for Berlin: reforms may improve flexibility and costs at the margin, yet still fall short of delivering a near-term economic turnaround.