Germany "to the top" – Comprehensive modernization agenda with 80 measures – Plan carries a €110 billion risk – Image: Xpert.Digital
Laws as code, AI in the ministry: This is how radically the government wants to restructure the state - Germany's expensive path to the top
Lower taxes, faster offices: These 3 changes from Merz's mega-plan affect everyone
Chancellor Friedrich Merz has presented an ambitious plan to restore Germany to a leading economic nation. With his promise to bring Germany "back to the top," the CDU politician has launched a comprehensive modernization agenda with 80 concrete measures designed to fundamentally transform the country.
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The vision of a modern nation
After concluding the two-day cabinet meeting at Villa Borsig in Berlin, Merz underscored his ambition for Germany's leading position in international competition. "We aspire to return to the top," the Chancellor declared, referring to a newly adopted "high-tech agenda," which he described as "comprehensive" and "really good for our economy."
The CDU-SPD coalition has set itself the goal of creating a "fast, digital, and effective state" that "makes decisions more quickly, delivers more reliably, and strengthens trust." This vision reflects Merz's conviction that Germany has all the necessary resources to overcome its economic challenges.
Five fields of action for modernization
The modernization agenda is strategically divided into five key areas of action, each addressing specific aspects of government renewal:
Noticeable reduction in bureaucracy
The first area of action focuses on eliminating unnecessary bureaucratic burdens for citizens, businesses, and administration. The government plans to drastically reduce bureaucratic costs by 25 percent, resulting in savings of approximately €16 billion by the end of the 2029 legislative period. To implement this, a strengthened bureaucracy brake will be introduced, which will require the abolition of two existing bureaucratic burdens for each new regulation.
A particularly innovative element is the establishment of a digital bureaucracy reporting portal through which citizens and businesses can report superfluous regulations. In addition, AI-supported tools are intended to help ministry staff make legislative texts more practical and less bureaucratic.
Better regulation
The second area of action revolutionizes the way laws are created. New regulations are designed from the outset to be addressee-oriented, practical, and digitally compatible, and to enable automation. A key element here is "law as code," which makes laws machine-readable and digitally implementable.
The government aims not only to simplify legal texts but also to ensure that they encourage rather than hinder technological innovation. This approach is intended to lay the foundation for more efficient administration and better citizen services.
Citizen and business-centric service
The third area of action fundamentally transforms administrative services. Administrative processes are being systematically digitized, and the government is being increasingly perceived as a partner of citizens and businesses. Accelerating procedures is at the heart of these efforts.
A key project is the nationwide online vehicle registration process, which will relieve the burden on over 400 regional registration authorities and enable significant time and cost savings for citizens and businesses. In parallel, a uniform 24-hour company formation process will be introduced, consolidating the currently approximately 6,000 different process variants.
Future-oriented personnel development
The fourth area of action modernizes human resources in the federal administration. The government plans a comprehensive modernization of civil service regulations, targeted skills development, and a strengthening of the performance principle. Agile team structures and a positive error culture based on a culture of trust are intended to improve service quality.
At the same time, a strategic realignment of human resources management is planned to better meet the challenges of the future. This includes both the promotion of future-oriented skills and modern forms of collaboration.
Efficient federal administration
The fifth area of action aims at a fundamental streamlining of administrative structures. The federal government's staffing levels are to be reduced by eight percent, while material costs are to be cut by ten percent. In addition, a reduction in the number of federal agencies and administrative units is planned.
The consolidation of the federal government's data centers, IT services, and networks will be intensified, and software and AI applications will be developed and procured centrally. Continuous monitoring via an evaluation portal will measure and manage progress.
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Evaluate instead of promise: How the government wants to ensure progress
Leverage projects for tangible changes
The modernization agenda defines 23 key lever projects designed to deliver concrete and quickly tangible improvements. These projects range from the digital transformation of everyday administrative processes to innovative solutions for complex societal challenges.
A particularly important project is the establishment of a digital "work-and-stay agency," which significantly facilitates the immigration of skilled workers and their integration into the German labor market. Visa matters and the recognition of professional qualifications can be handled centrally via this platform, which is of great importance given the acute shortage of skilled workers.
An AI-supported platform will be created for export-oriented companies that will pool information on foreign trade promotion and development cooperation. This initiative is intended to help German companies tap into new markets and strengthen their international competitiveness.
Another focus is on accelerating planning and approval procedures, the so-called "Construction Turbo." This measure is to be introduced into Parliament this year and will enable significantly faster procedures for housing construction.
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Economic policy foundations of the reform
The modernization agenda is part of a broader economic strategy aimed at restoring Germany to a leading economic nation. Merz has already made important decisions in his first 100 days in office, including a comprehensive tax reform for large and medium-sized companies.
The key elements of the economic relief include accelerated depreciation, which allows companies to write off investments in new assets faster than ever before. Up to two-thirds of the value can be written off in two and a half years. Parallel to this, a declining corporate tax rate is planned, which will decrease by one percentage point annually starting in 2028 and is expected to reach the lowest level ever in Germany by 2030.
The CDU/CSU's election platform proposes further far-reaching tax reforms. The top tax rate will only apply to incomes above €80,000, instead of just under €70,000 as before. The solidarity surcharge will be completely abolished, and overtime pay for full-time workers will be tax-exempt.
Technological openness as a competitive advantage
A central aspect of Merz's vision is technological openness, which is key to Germany's return to global leadership. The Chancellor emphasizes that it must be left to engineers, developers in companies, universities, and researchers to develop new technologies. Europe needs technologies that make it environmentally friendly while simultaneously creating competitive advantages.
This attitude is reflected in the "Made for Germany" initiative, in which 61 large companies plan to invest up to 631 billion euros in Germany by 2028. Merz sees this as one of the largest investment initiatives in decades and aims to strengthen public investment with private capital to trigger sustainable growth effects.
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Challenges and criticism
Despite the ambitious plans, Merz and his government face significant challenges. The German economy has been in a phase of stagnation for over two years, and experts are skeptical whether the proposed measures will be sufficient. Leading economic research institutes continue to forecast weak growth, with only 0.2 percent for 2025 and 1.3 to 1.4 percent for 2026/2027.
Association representatives are increasingly expressing impatience with the pace of reforms. At a summit in the Chancellery, the heads of the four largest associations read Merz the riot act and called for faster reforms. Businesses are complaining of "tangible disappointment" and demanding more concrete progress in improving the conditions for business.
The financing of the planned reforms is also a concern. Economic researchers estimate that the tax cuts and other relief measures could create a financing gap of between €87 billion and over €110 billion. Since the debt brake is immutable for the Union, the question arises as to how this gap will be closed.
International dimension and European leadership
Merz's ambitions extend beyond national borders. He sees Germany as responsible for assuming a leading role in Europe and strengthening European competitiveness. An unpublished study by the Konrad Adenauer Foundation, which is close to the CDU, shows that Europe has significantly lost global competitiveness in recent years.
The EU member states' share of global exports fell from 16.3 percent in 2016 to 14.3 percent in 2023. The Foundation advises Europe to pursue comprehensive economic partnerships with emerging economies, but the experience with the Mercosur agreement shows how protracted such negotiations can be.
Implementation and success measurement
The modernization agenda is designed as a binding, cross-departmental roadmap with clear deadlines and continuous monitoring. The first projects are to be implemented immediately, and progress will be regularly reviewed by the Cabinet.
An evaluation portal for progress measurement and control is intended to ensure that the goals are actually achieved. This systematic approach differs from previous reform attempts and is intended to ensure the necessary implementation discipline.
Experts warn, however, that the crucial question is whether projects and deadlines can actually be met. WirtschaftsWoche describes the package as a "liberating move," but sees parallels to previous attempts and points to the need for measurable progress on long-standing issues such as the unbundling of responsibilities.
Optimism despite challenges
Despite all the difficulties, Merz remains optimistic and calls for a new German mentality of optimism and proactiveness. He points to concrete figures that justify hope: Investment commitments from foreign companies in Germany have increased by a third in recent weeks, and investment commitments will grow to 900 billion euros over the next three years.
Merz's message is clear: "The glass is not half empty. The glass is half full. And we are now making sure we fill it up." This attitude also shapes his approach to the modernization agenda, which he positions as the starting point for an accelerated legislative and implementation process.
The 80 measures of the modernization agenda represent a comprehensive attempt to prepare Germany for the challenges of the 21st century. Whether this ambitious plan will actually lead to Germany's return to the forefront remains to be seen in the coming years. The decisive factor will be whether the individual measures can be consistently implemented while meeting both the expectations of the economy and the needs of its citizens.
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