German executives urge swift government action to revitalize struggling economy

FRANKFURT, Germany — The current state of Germany’s economy has left many business leaders feeling dissatisfied with the government’s responses to ongoing economic stagnation. With the national elections taking place on Sunday, there is a glimmer of hope for the establishment of a stable coalition between conservatives and the center-left Social Democrats, potentially led by center-right figure Friedrich Merz as chancellor. However, questions loom over whether swift measures will be taken to address the immediate concerns voiced by the business community.

Key figures in the German economy have shared their thoughts on the urgent need for action. Christian Klein, CEO of the software company SAP SE, emphasized that addressing critical challenges—such as excessive regulation, a lack of digital advancement, and slow economic growth—demands bold governmental measures. He remarked, “Germany needs a leadership that embraces innovation, fosters competitiveness, and dismantles the burdensome regulations that hinder growth, and it requires this change urgently.”

The luxury car manufacturer BMW AG expressed aspirations for the next federal government to promptly and sustainably enhance the business landscape for German industries facing global competition. This includes enacting a competitive tax framework, pragmatically reducing bureaucratic hurdles, and shifting EU policies to be more business-friendly.

Peter Adrian, who heads the real estate company Triwo AG and serves as president of the German Chamber of Industry and Commerce, noted the significance of the high voter turnout, which reached 82.5%. He remarked that this figure illustrates widespread recognition of the pressing implications surrounding the upcoming decisions, suggesting a strong need for a directional shift.

Carsten Brzeski, the global macro chief at ING Bank, pointed out that the incoming government should prioritize reversing the stagnation affecting the economy. He cautioned that if preventing the electoral success of the far-right Alternative for Germany (AfD) becomes the coalition’s main agenda, they may face challenges, especially if they do not achieve substantial results.

Thorsten Groeger, leader of the IG Metall industrial union in the regions of Lower Saxony and Saxony Anhalt, stressed the urgency of the situation. He highlighted that numerous companies have begun laying off workers and scaling back their investments at home. He called for significant funding to be directed towards energy security, modern infrastructure, advanced technologies, quality education, affordable housing, and a comprehensive welfare system.

Peter Leibinger, representing the Federation of German Industries, asserted that the political parties must demonstrate their awareness of the severe nature of the economic crisis. He urged them to take decisive and swift action in unison to halt the troubling trends of insufficient investment and sluggish growth.

On a more cautious note, Holger Schmieding, chief economist at Berenberg Bank, raised concerns over the rise of populist parties, which now hold more than one-third of parliamentary seats. He highlighted that these parties could obstruct any modifications to the constitutionally mandated debt limits. As Germany seeks to increase military spending and provide support for Ukraine, the potential lack of fiscal flexibility could complicate its efforts to alleviate tax burdens on both individuals and businesses.