Former Hessian Minister-President Roland Koch advised the Union party to accept compromises during ongoing tax reform negotiations if necessary, but insisted that a reform of the labor market must be secured. Speaking to Politico, Koch stated that the Union should not conclude talks without achieving greater flexibility in the job market. He believes a comprehensive package deal between the Union and the Social Democrats is possible, although he noted that both sides would ultimately have to accept things they initially opposed.
When asked whether a package containing both labor market flexibility and concessions on the wealth tax was conceivable, Koch replied, “I am not the negotiator, but I do not have to dismiss your fantasies.” He added that some social democrats had underestimated the importance of labor market reform to the Union. If the Union succeeds in this area, they would also be compelled to make compromises on other flashpoints important to the Social Democrats.
According to the former Hessian leader, while the current reform packages concerning pensions, healthcare, and taxes include many necessary measures, they do not ensure greater economic growth. Koch argued that “constantly dividing the cake into finer pieces, instead of figuring out how to grow the cake, is impossible.” He pointed to Volkswagen as a warning sign, calling it a classic example of this problem.
Furthermore, Koch strongly advocated for reducing subsidies. He argued that the state must reduce expenditures, and only then can money be returned to the citizens. He warned that if the Union refused to cut subsidies, it would not be wise in the long run.
