Germany’s CDU Economic Wing Seeks to Cap State’s Share of GDP at 45%
The economic wing of Germany’s Christian Democratic Union (CDU) is pushing to reduce the state’s share of the country’s GDP to below 45 percent, according to a recent decision by the party’s federal board, as reported by Politico. The move is part of the Mittelstands- und Wirtschaftsunion (MIT), a union of medium-sized businesses and the economy, which aims to establish a binding upper limit for the state’s share of the economy.
MIT’s federal chair, Gitta Connemann, a parliamentary state secretary in the economy ministry and the government’s middle-class representative, emphasized the need for a binding upper limit, stating, “The state must not become even more dominant.” The CDU should incorporate this goal into its party program, she added, but only a legal regulation would make the cap binding.
The state’s share of the economy, known as the state’s quota, has been steadily increasing, reaching 49.5 percent in 2024, according to the latest data. The Council of Economic Experts forecasts that the quota will exceed 50 percent this year. To reduce the state’s share by five percentage points, the government would need to cut its expenditures by over 200 billion euros, assuming a constant level of economic activity.
The MIT is calling for reforms in the areas of social welfare, social insurance, administration, subsidies and economic promotion, with a focus on simplifying the complex system of support programs for small and medium-sized enterprises. Connemann criticized the current state of affairs, saying, “We have a ‘subsidy jungle’ in Germany, where companies often have to adapt to the programs, not the other way around.” The union is vowing to challenge every support program, even those with a focus on structural relief, in an effort to reduce the burden on businesses and promote a more level playing field.