High unemployment remains the key economic problem.
Certain aspects of German tax, labor, health, environmental and safety regulations are excessively burdensome and serve as an effective impediment to new investment. Non-wage labor costs are also quite high. Recognizing these facts, the Government has developed a program of spending, taxation, social insurance and regulatory reforms to address aspects of these problems. Thus far the government has only been able to enact a portion of it reform plans. The key components such as pension and taxation reforms were derailed by electoral-related disagreements between the governing coalition and the leading opposition party.