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Germany runs into a specific ceiling on the supply side of its economy: employer exposure to sick-leave costs that inflate the effective price of labor, and Sunday trading laws that compress retail activity into six calendar days per week.
Merz's ruling coalition has agreed to work on both at once, coupling €10bn in tax relief with tighter sick-leave rules and extended Sunday opening hours as part of a push to revive growth.
The mechanism behind the retail measure is direct.
Germany's Sunday trading restrictions have historically required most retail to close or operate under tight limits, and every closed Sunday is a day of forgone consumer spending.
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