Therefore, it is not surprising that constitutional considerations have decisively influenced the reform process. Nonetheless, the fundamental law is threatened with internal and external challenges that threaten to destabilize its significance in the long term.
Germany in a long time has been considered an example of the central welfare regime and its political bodies favor the policy status quo, Stiller (2010) states. Hence, finding reforms in Germany is at odds with anticipated patterns of change in domestic policy. Conferring to a senior German political observer, change in domestic policy typically needs a longer period of planning, is usually incremental in nature, and occasionally borders on an institutional inertia degree. Opponents describe this as immobilization of policy. The perspective of the policy implies that, the country has been struggling to carry out essential reforms. However, those passed reforms that have given tend to be incremental adjustments that do not adequately address the underlying problems (Stiller, 2010).
Longtime welfare state stability of Germany becomes even more puzzling if one considers the combination of pressures for reform. They comprise of obstinately high rates of unemployment and sluggish growth of the economy. Others include the comparatively high tax burden on labor and adverse demographic trends together with the rapid aging of the populace, and moderately low rates of fertility (Stiller, 2010).
The institutional environment, mostly defined the labor market reforms challenge in Germany during the early 2000s. There were significant potential veto players involved in the policy process. They were given the heterogeneity of political parties in Germany and divided control of the state parliament. There was also the complexity of German federalism and the strong tradition of rendering