“Frustration and uncertainty”
Business bosses send fire letter to Chancellor Scholz
January 30, 2024, 6:39 p.m
The leading German business associations warn in a fire letter to Chancellor Scholz: Frustration and uncertainty are growing in many companies. They are calling for an economic awakening and at the same time presenting possible measures for this.
In an incendiary letter to Chancellor Olaf Scholz, the leading German business associations called for reforms for an economic awakening in Germany. “Frustration and uncertainty are growing among many companies,” the letter says.
“We are observing the political, social and economic developments in which our country finds itself with great concern,” it continues. Germany is becoming less attractive as a location. The relocation of industrial production abroad is increasing. “But if there is no investment in this country and the middle class shrinks, the transformation towards climate neutrality cannot succeed.”
With a “strong signal of departure” and long-term, reliable, business-friendly framework conditions, politicians can and must build more trust among companies and create confidence for a successful transformation. The federal government must take measures that promote an economic revival.
Lindner finds the initiative “very welcome”
Federal Finance Minister Christian Lindner spoke of an initiative that was “very welcome”. “After consolidating the state budget, dynamizing the economy is now a priority. Social and ecological projects cannot be financed without growth,” said the FDP chairman in response.
Specifically, the associations are calling for, for example, faster planning and approval procedures, a “liberation stroke” in the bureaucracy, a tax reform, a “stop sign” in social security contributions and pension reforms. Lindner said: “The suggestions from the German economy form a good basis for a necessary dynamization package from the federal government.”
The letter comes from the presidents of the Federal Association of German Employers’ Associations, the Federal Association of German Industry, the German Chamber of Commerce and Industry and the Central Association of German Crafts.
VDA also criticizes traffic lights
Meanwhile, the Association of the Automotive Industry has also called for more commitment from the Federal Government and the European Union in negotiating free trade agreements. “Every agreement that is not concluded strengthens the others and weakens us,” said VDA President Hildegard Müller. She also called on the federal government to quickly strengthen Germany as a business location. “In the past year we have not made any significant progress in many important areas: not in terms of competitive energy prices, not in terms of a competitive tax system, not in terms of reducing bureaucracy,” said Müller.
Politicians are also too busy managing crises and justifying their decisions and projects on the principle of crisis. “The crisis must not become the most important argument to explain or even justify decisions,” said Müller. This only creates the impression that the traffic light coalition is not pursuing its own strategy.
For the coming year, the VDA expects slight global growth of two percent in the car market. The association expects a slight decline of one percent for the German market. The VDA expects big differences between new registrations and the production of purely electric cars in Germany. The association expects a strong increase of 25 percent in production in Germany – but a decline of around 14 percent in new registrations. The main reason for this assumption is the reduced funding for electric cars.