The German Confederation of Skilled Crafts (ZDH) is issuing a stark warning to the federal government, accusing it of neglecting the critical needs of the Mittelstand – Germany’s vital small and medium-sized enterprises. ZDH President Jörg Dittrich voiced his concerns in an interview with the “Rheinische Post” expressing a profound disconnect between government actions and the realities faced by countless businesses.
Dittrich’s critique extends beyond general dissatisfaction, directly criticizing the perceived lack of targeted support for the Mittelstand. He argues that focusing aid solely on specific industries is insufficient to address the pervasive gloom impacting the broader German economy. The failure to uniformly lower the electricity tax, a promise made by the government, has been particularly damaging. Many small, energy-intensive businesses, ineligible for previous relief measures due to not being classified as producing industry, have been left struggling, creating what Dittrich described as an “emotional shockwave” comparable to the backlash surrounding Economy Minister Robert Habeck’s controversial heating law.
The planned Mittelstand dialogue initiated by Economics Minister Katarina Reiche (CDU) has been deemed inadequate to remedy the situation. Zeit is running out, according to the ZDH president. Insolvency rates are rising and a “silent dying” is occurring within the craft sector as businesses buckle under mounting financial pressures, forcing closures. He insists swift, tangible measures are needed to demonstrate that the government genuinely understands the challenges.
Dittrich highlighted several points within the existing coalition agreement that could be implemented immediately, including the repeal of the Sunday baking ban for bakers and the elimination of the mandatory prescription requirement – simple changes with a significant impact on smaller operations. Another point of contention is the planned corporate tax reduction set for 2028, which currently excludes partnerships. The suggestion from the Social Democratic Party (SPD) that businesses could simply convert into limited liability companies (GmbHs) to benefit from the tax break has been sharply dismissed. He underscored that this proposition is financially and legally impractical for many and culturally unacceptable, representing a fundamental misunderstanding of the structure and ethos of numerous Mittelstand businesses. The current approach, he argues, risks further eroding confidence and driving more businesses toward collapse.