Berlin buys Tomahawks, pushes labour cuts and gas subsidies
Chancellor Merz's new coalition is acquiring US cruise missiles and advancing a package of labour and energy reforms that will reshape the operating environment for German businesses and workers.
Germany has agreed to purchase Tomahawk cruise missiles from the United States. Simultaneously, Chancellor Merz’s new coalition government is advancing a sweeping domestic agenda that includes curbing sick leave, easing employee dismissal rules, and cutting parental benefits.
The missile deal, struck on the sidelines of the recent NATO summit, is framed by Berlin as a necessary step to close a strategic defence gap and deter Russia. However, as the newspaper Tagesspiegel noted, the acquisition will cost Germany huge sums for a system that former US President Joe Biden had previously planned to provide free of charge.
Ahead of the summer recess, the coalition is pushing through measures that signal a notable shift in Germany's social contract. For companies, plans to make it easier to dismiss employees and crack down on the abuse of sick leave represent a potential shift in labour market dynamics.
The economic implications extend to energy policy, where the government plans to cut subsidies for heat pumps while introducing legislation to subsidise a new generation of gas-fired power stations. Family finances will also be affected by reductions to Elterngeld parental benefits and international development aid.
The government is also moving to alter Germany's Freedom of Information Act. If passed, these changes could make it harder for journalists and organisations to scrutinise government decision-making.
Public life and diplomacy
The muscular domestic and defence posture was mirrored in unusual diplomatic optics at the NATO gathering. Host Recep Tayyip Erdoğan gifted Chancellor Merz and other leaders personalised, engraved revolvers loaded with live ammunition. While Canadian Prime Minister Mark Carney joked that his gift of maple syrup paled in comparison, Merz’s weapon was sent to the German embassy for official inventory.
Away from the missiles and parliamentary debates, a quieter shift in German norms is playing out in Munich. At Fux Gasthaus, a pub workshop called Dads Do Hair has sold out its initial sessions. Inspired by London’s "Pints and Ponytails", hair and make-up artist Anita Erdmann teaches fathers to style their daughters' hair.
The demand highlights a practical desire to share domestic duties. "I have two girls at home, and my wife always has to do their hair by herself. Now I can help her out and my girls can go to preschool looking nice," one father said. Erdmann noted that some participants have become so enthusiastic they bought toolboxes for hair accessories and took over the morning styling routine entirely.
