German Chancellor Friedrich Merz on Thursday announced sweeping reforms with the goal of getting the country’s sluggish economy back on track.Among the key proposals is tougher sick leave rules that could require employees to provide medical proof from the very first day they are off work.The other measures include cuts to income tax for low- and middle-income families, overhaul of the pension system and a reduction of the country’s stifling bureaucracy.The 34-point reform agenda is part of the government’s broader effort to boost productivity and address long-term economic challenges that have weighed on growth.The German government argues that high levels of employee absenteeism are hurting productivity at a time when the country’s economy is struggling with weak growth, high production costs and mounting pressure on public finances.Merz has repeatedly expressed concern over the country’s sick leave rates, saying they are affecting businesses and the wider economy.Under the existing rules, employees can call in sick for up to three days without necessarily obtaining a doctor’s certificate.In many cases, workers can also receive a sick note covering up to a week after a phone consultation with a doctor. These provisions were expanded in recent years to make healthcare access easier and reduce unnecessary visits to clinics.“These reforms all have one goal: We are setting out into the future. We are strengthening ourselves so that we can live well in these new times,” Merz said.“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 conservative chancellor said.Germany’s economy returned to modest growth last year after shrinking for two years in a row. The government expects an underwhelming growth of 0.5 per cent this year, a figure that has been pushed down by the fallout from the Iran war.The government has paired the sick leave changes with a broader economic reform package. Measures include income tax cuts for low- and middle-income households, efforts to simplify tax filings and reporting requirements and a reduction in bureaucratic procedures that businesses have long complained about.The German government announced that that the tax cuts, once fully implemented in 2028, would give an annual tax break of about 600 euros for a family with two working parents, two children and a total taxable income of 60,000 euros.The total tax relief provided by the reform amounts to approximately 10 billion euros per year.