Germany's Merz vows reform plans to boost economy in weeks

BERLIN, June 11 (Reuters) - German Chancellor Friedrich Merz said on Thursday his government aimed to agree reforms to strengthen the flagging economy in the next few weeks as he pushes to finalise the main elements with coalition partners before parliament goes to recess next month.

Leaders of Merz's coalition met business and trade union representatives at the chancellery on Wednesday to discuss reforms in areas such as cutting red tape. Business groups had been pressing for a concrete timetable ahead of the meeting.

"We know that time is of the essence. Every day, jobs are still being lost in industry. Every day, companies in our country are going out of business because of excessive costs and, above all, the heavy bureaucratic burden," he told parliament.

"Our aim is to further develop and present our proposals for the major reform tasks in the coming weeks and months," he said in a wide-ranging speech on government priorities ahead of next week's European Union summit in Brussels.

As well as reiterating Germany's support for Ukraine, which he said belonged in the EU "in the longer term", he repeated calls for Europe to move more quickly on deregulation to help business, saying measures would have to be initiated by next year at the latest.

He also rejected more common EU debt, saying excessive debt threatens national sovereignty.

PRESSURE FOR REFORMS

Merz, trailing heavily in opinion polls behind the far-right AfD party, has been struggling to pass a wide-ranging package of reforms to the tax, welfare, health and pensions systems that he says are needed to revive Germany's stalling economy.

Wide differences still exist with his centre-left Social Democrat partners over potential tax cuts and where the weight of shoring up the pension system in a country with a rapidly ageing population.

Merz, normally a strong pro-market advocate, has focused on reaching a broad agreement with his partners. But with the start of the parliamentary summer recess on July 11 fast approaching, there has been heavy pressure to present results.

Business and union representatives at Wednesday night's meeting said the discussions had been positive but no concrete agreements were announced.

Peter Adrian, head of the German Chamber of Commerce and Industry (DIHK) said he was "very optimistic" that a package of reforms can be presented before the summer recess.

"The government has a strong interest in getting results here. It doesn't have much time left to do so either," he told ZDF public television.

(Reporting by Ludwig Burger, Linda Pasquini and Andreas Rinke; editing by Friederike Heine)