The passage of the Collective Bargaining Loyalty Act and the Procurement Acceleration Act, initially slated for completion this year, is now facing significant delays, according to reports from Politico, citing sources within the parliamentary groups. The two legislative initiatives, intrinsically linked, were originally projected to be finalized by 2025.
Following a cabinet decision in the summer and an initial reading in October, the legislative process has stalled, raising concerns about the utilization of the special fund – slated for a substantial €60 billion in 2026. Current regulations will dictate the fund’s disbursement, potentially hindering intended reforms and efficiency gains. Parallel negotiations surrounding the Collective Bargaining Loyalty Act between the Social Democratic Party (SPD) and the Christian Democratic Union (CDU) have reportedly frozen. Despite nine committee meetings, no significant progress has been achieved.
Central to the impasse are three contentious points. The draft legislation proposes that either a trade union or an employer’s association can request the determination of collective bargaining conditions – a provision opposed by the CDU, which insists on a joint application from both parties. Furthermore, the CDU is pushing for a requirement that future decisions involving the Act receive the approval of the entire cabinet, rather than solely the labor minister, Bärbel Bas (SPD). A third area of disagreement relates to calls from the CDU to exclude the retail sector, mirroring practices already implemented in several other German states.
The Procurement Acceleration Act is similarly troubled. Politico reports that several crucial discussions on the CDU side have been disrupted by illness. Beyond this, experts are criticizing plans to subdivide contracts into smaller portions to encourage participation from medium-sized enterprises. Within both parliamentary groups, a fundamental debate is underway regarding the prioritization of overall tenders for speed versus a contract breakdown fostering a stronger role for medium-sized businesses. The matter now rests with the parliamentary group vice presidents, indicative of the severity of the gridlock and raising questions about the government’s ability to deliver on key economic reform objectives. The delays risk undermining confidence in the government’s ability to effectively utilize taxpayer funds and streamline vital processes.