Despite ambitious goals, critics remain skeptical about rapid results, viewing recent efforts as small reforms, and doubt major structural changes will happen quickly.

The coalition also sought to improve internal relations and decision-making processes to avoid conflicts, especially over policy issues such as energy taxes and judicial appointments.

Germany faces a challenging start with low approval ratings, a fragile parliamentary majority, and rising support for the AfD, prompting efforts to foster unity and strategic planning.

The government emphasized strategic modernization, including personnel planning, digital transformation, and eliminating redundant functions to make administration more efficient over the next 20-25 years.

Expert input from Princeton economist Markus Brunnermeier highlighted structural issues like an aging population, skilled labor shortages, and bureaucracy as key challenges for Germany.

Concrete decisions on measures like creating a unified online portal for vehicle registration, digital complaint platforms, and AI training for officials are scheduled for the second day, aiming to streamline bureaucracy and digitalize government services.

The retreat's core topics included state modernization, enhancing economic competitiveness, and advancing future technologies through structural reforms.

Chancellor Merz described the retreat as the beginning of an 'autumn of reforms,' emphasizing a long-term process of ongoing reforms extending into future seasons.

The government aims to enhance competitiveness by focusing on economic growth, deregulation, infrastructure modernization, and environmental policies.

German Chancellor Friedrich Merz led his coalition government in Berlin at Villa Borsig for their first major two-day cabinet retreat, focusing on reforms to boost economic competitiveness and modernize the state amid internal disagreements and external economic pressures.

The retreat aimed to strengthen cooperation between coalition parties CDU and SPD, with discussions on reducing bureaucracy, improving infrastructure, and implementing structural reforms to address Germany's economic challenges.

A key part of the agenda involved reviewing new laws for better legal drafting, digital readability, and alignment with real-life situations, alongside efforts to streamline legislation through AI training for government staff.

Initial discussions focused on economic growth, reducing trade barriers, deregulation, and infrastructure improvements, with input from industry and research experts.