A top executive of the German banking association, Heiner Herkenhoff, has warned against prolonged coalition negotiations. According to him, three months or more of negotiations could be a catastrophe for the economy. In an interview with the online news portal T-Online, Herkenhoff expressed concerns that a prolonged period of uncertainty could harm the economy, which has already been in a state of weakness for years. He noted that Germany has not experienced significant growth since 2019, while other countries have seen a surge in growth.
Herkenhoff’s comments come as the country awaits the formation of a new government, which he believes must make swift decisions and remove growth obstacles. He expressed cautious optimism about the new government’s economic policy direction, stating that a quick government formation and initial progress are essential. However, he emphasized that the bureaucracy must be reduced decisively, as it is a significant obstacle to growth.
Herkenhoff also called for Germany to take a clear stance on European issues, suggesting that the country’s “German vote” in Brussels should be ended, allowing Germany to take a more active role in decision-making. He also touched on the need for the government to address challenging topics, such as the debt brake and cuts to the citizen’s allowance and the necessity of finding a solution to the country’s growing financial needs, particularly in the defense sector, which is expected to require an additional 30 to 50 billion euros per year. While Herkenhoff did not rule out a reform of the debt brake, he opposed its complete abolition. He also emphasized the need to set incentives for work, rather than a complete cut to the citizen’s allowance.