German president welcomes coalition government's reform package

German President Frank-Walter Steinmeier has welcomed the coalition government's agreement on a major reform package, saying it could mark a turning point after months of political strife.

"Something has finally happened. In my view, it is also something important," Steinmeier told the German broadcaster ZDF in an interview shown on Sunday. 

"We could be currently witnessing a new phase in the coalition's policy. By that, I mean that the self-imposed deadlock within the coalition has been lifted and resolved," he said. 

Alluding to the ongoing World Cup, he said: "The coalition has just moved beyond a purely defensive stance and is now playing an attacking game."

The coalition made up of Chancellor Friedrich Merz's conservative bloc and the centre-left Social Democrats presented a 34-point reform package covering tax, employment and measures to cut red tape earlier in July.

The package includes tax relief for those on low and middle incomes from 2027, financed by changes to the wealth tax for high earners. 

The coalition partners also agreed on a number of changes for the labour market, including allowing employers to offer more fixed-term employment contracts and to terminate employment relationships with high earners more easily.

Regarded as the coalition's central domestic policy project, the reform package is a chance for the government to project an image of unity and progress after an earlier attempt to reach an agreement collapsed, and with the parties' approval ratings sliding ahead of state elections in eastern Germany later this year.

Steinmeier said that patience and perseverance was now needed to implement the decisions, most of which still need to be passed by parliament, but added he is cautiously optimistic about the coming weeks. 

"I really do recommend that we head into this summer with a little more confidence than we have actually been able to muster in recent summers," he said.