Germany's coalition agrees package to boost growth and passes court ruling on sex dolls

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Germany news: Coalition agrees package to boost growth

Richard Connor with AFP, AP, dpa, Reuters, SID, KNA, epd

Published 07/02/2026Published July 2, 2026

Chancellor Friedrich Merz says his coalition has cleared a reform package as pressure grows to deliver growth. Meanwhile, a top court rejects complaints against the criminalization of childlike sex dolls. DW has more.

https://p.dw.com/p/5GQI0

Skip next section What you need to know

What you need to know

Chancellor Friedrich Merz says his coalition has approved a 'catalogue of significant reforms' after coalition talks in Berlin

The package includes €10 billion in income tax relief, an end to phone-based sick notes and plans to implement pension reforms

Germany's Federal Constitutional Court has upheld a ban on sex dolls with childlike features

A fire at a hospital in northern Germany has killed two patients

Here is a roundup of the latest headlines from Germany on Thursday, July 2, 2026:

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Skip next section German businessmen admit sanctions breach over Russia exports

07/02/2026July 2, 2026

German businessmen admit sanctions breach over Russia exports

Two businessmen have confessed to illegally exporting industrial equipment to Russia in violation of EU sanctions.

Prosecutors said the German-Russian brothers, aged 34 and 39, shipped machinery parts worth more than €830,000 ($945,755) via third countries despite restrictions linked to the war in Ukraine.

The case is being heard at the regional court in Münster, where the pair admitted 65 violations of Germany’s foreign trade laws.

According to investigators, goods were routed through shell companies in Kyrgyzstan and Turkey before reaching Russia.

The brothers said their father, who faces separate proceedings, had pushed them to continue the business. "We knew what we were getting ourselves into," one told the court.

Under a deal to avoid a lengthy trial, both face potential sentences of up to four years and eight months.

https://p.dw.com/p/5GQNJ

Skip next section Court upholds ban on childlike sex dolls in Germany

07/02/2026July 2, 2026

Court upholds ban on childlike sex dolls in Germany

Germany's top court has upheld a ban on sex dolls with childlike features.

The Federal Constitutional Court rejected constitutional complaints against the law, ruling that restrictions on personal rights are justified.

The regulation, introduced in 2021, criminalizes the production, sale, purchase and possession of such dolls.

The complainants had argued the law violated their right to sexual self-determination, but the court disagreed.

Under the law, producing or distributing the dolls can carry prison terms of up to five years, while possession or purchase can lead to up to three years in jail or fines.

https://p.dw.com/p/5GQVY

Skip next section What did the other coalition leaders say?

07/02/2026July 2, 2026

What did the other coalition leaders say?

Appearing alongside Chancellor Friedrich Merz at the chancellery garden press conference, the three other leaders of the coalition parties enthusiastically hailed the reforms.

The co-leader of the center-left Social Democrats (SPD), Finance Minister Lars Klingbeil, said he believed the reforms would enjoy widespread pubic support, with an emphasis on fairness.

The coalition had "agreed on solutions that can be supported by a broad majority of our society," said Klingbeil, adding that he was "firmly convinced that these decisions will give our country new strength."

SPD co-leader Bärbel Bas said the package would "indeed ensure that the economy grows again, that we achieve growth and secure jobs, while maintaining social balance, and, above all, that we strengthen cohesion within our country."

Meanwhile, the leader of Bavaria's conservative Christian Social Union, Markus Söder, described the package as "well-rounded."

Each coalition partner would have liked to see more in certain areas, he said. "But a coalition means compromise."

"We are making progress," said Söder. While the package was not a "big bang" in itself, he noted, it was another step away from economic stagnation.

https://p.dw.com/p/5GQu7

Skip next section Merz coalition agrees sweeping reform package

07/02/2026July 2, 2026

Merz coalition agrees sweeping reform package

Germany's centrist coalition government has agreed on a broad package of reforms as it seeks to revive a sluggish economy and push through key changes after its first year in office.

Chancellor Friedrich Merz said his conservative CDU/CSU bloc and the center-left Social Democrats (SPD) had approved a "catalogue of significant reforms" to modernize the economy and restore competitiveness.

The announcement came at a press conference, with Merz alongside SPD leaders Bärbel Bas and Lars Klingbeil, as well as the leader of Bavaria's conservative Christian Social Union, Markus Söder. The four coalition leaders had met in Berlin the previous day to hammer out the final details.

Measures include €10 billion ($11.4 billion) in income tax relief, the end of phone-based sick notes, and the implementation of pension commission proposals by the end of 2026.

"We are providing relief to employees and businesses by cutting taxes and reducing bureaucracy. We have now completed our first year of reform. From the very beginning, we set an agenda serving a single goal: We want to get Germany moving again. It is now clear that this is possible," Merz said.

With his party lagging behind the far-right Alternative for Germany ​party in polls, Merz faces pressure ​to ‌pass reforms to reinvigorate Europe's largest economy but has struggled to overcome wrangling ‌within the coalition.

German pension plans draw praise, criticism

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https://p.dw.com/p/5GQQc

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