FRANKFURT, Germany – The ongoing stagnation of Germany’s economy has led to increasing frustration among business leaders who are calling for decisive government action. With the national elections on Sunday, there is a glimmer of hope for a stable coalition government formed by conservatives and the center-left Social Democrats, potentially led by center-right figure Friedrich Merz as chancellor. However, the pressing question remains: will this new administration respond swiftly to the demands of the business community?
Responses from key economists and business executives paint a picture of urgency. Christian Klein, the CEO of SAP SE, emphasized the need for bold measures to address critical concerns such as excessive regulation, inadequate digitalization, and economic slowdown. He stated that “Germany requires a government that embraces innovation, fosters competition, and eliminates unnecessary regulations that hinder growth—this change is essential now.”
Similarly, luxury car manufacturer BMW AG is expecting the new federal government to swiftly create a more favorable business climate for the nation’s industries, which are grappling with international competition. The company advocates for a competitive tax strategy, a pragmatic reduction of bureaucracy, and a more business-friendly approach on the European Union level.
Peter Adrian, CEO of Triwo AG and president of the German Chamber of Industry and Commerce, noted that the high voter turnout of 82.5% reflects the broader recognition of the significant decisions facing the nation. He remarked, “A shift in direction is overdue.”
Carsten Brzeski, from ING Bank, underscored the necessity for the new coalition to alleviate the structural stagnation of the economy. He warned, “If this coalition’s primary goal is merely to stave off the far-right AfD’s electoral advance, it is likely to fail unless it succeeds in revitalizing the economy.”
Thorsten Groeger, who leads the IG Metall industrial union in the regions of Lower Saxony and Saxony Anhalt, expressed concern about the increasing trend of companies laying off employees and curtailing investments. He outlined that billions need to be allocated towards energy security, modernizing transportation infrastructures, high-speed internet networks, innovative technologies, strong education systems, affordable housing, and a welfare state that supports all citizens.
Peter Leibinger, head of the Federation of German Industries, called on political parties to demonstrate their awareness of the urgent situation and to act decisively and collaboratively. He insisted, “We must halt the perilous trend of declining investment and feeble growth.”
Holger Schmieding, chief economist at Berenberg Bank, offered a sobering view, reporting that populist parties like the AfD and The Left have managed to secure over a third of parliamentary seats. He cautioned that this could lead to challenges in modifying the constitutional debt brake, complicating efforts to increase spending for military needs, support for Ukraine, and alleviate the tax burden on both individuals and businesses in the current critical climate.
