Major Legislative and Economic Reforms Set to Impact German Businesses and Workers in 2026

The German coalition government has unveiled a sweeping package of legislative and economic reforms scheduled to take effect in 2026, aimed at boosting the economy and affecting a wide range of stakeholders including businesses, employees, pensioners, and drivers.

Central to the government’s plan is a significant reduction in bureaucracy, targeting a 25% cut that translates to an estimated relief of 16 billion euros for the economy. However, this initiative has been met with skepticism from businesses, who are eager for concrete results beyond promises.

Among the confirmed legislative changes is an increase in the minimum wage to 13.90 euros per hour, enhancing income for workers across sectors. Pension regulations will also shift, notably raising the pension age for disabled individuals. Additionally, a new scheme called the "Aktivrente" will enable retirees, excluding self-employed persons, to earn up to 2,000 euros per month tax-free, encouraging continued workforce participation by seniors.

Environmental and transportation policies are also evolving; the CO2 tax is set to increase, thereby escalating heating costs for consumers relying on oil and gas. Furthermore, the price of the Deutschlandticket, Germany’s popular public transport monthly pass, will rise from 58 to 63 euros. New support initiatives aimed at apprenticeships and the promotion of electric vehicle adoption are planned to accompany these changes.

These reforms highlight the government’s intent to stimulate economic activity while addressing social challenges through targeted fiscal and social policy. Regular public updates are promised to ensure transparency as the changes roll out.

This comprehensive legislative package represents a pivotal development for German economic and labor landscapes, promising to reshape employment, pension schemes, taxation, and environmental costs in the country next year.