Leading economists are raising stark warnings about the damaging economic repercussions of Chancellor Friedrich Merz’s increasingly vocal and controversial statements on migration and its perceived impact on Germany’s urban landscape. Marcel Fratzscher, President of the prestigious German Institute for Economic Research (DIW), has directly criticized Merz’s rhetoric, arguing that it fuels societal division and inflicts considerable economic harm.
Fratzscher’s assessment centers on the vital link between Germany’s continued economic prosperity and its ability to attract skilled immigrants. He contends that Merz’s pronouncements are actively undermining the welcoming atmosphere that has historically drawn this crucial workforce. “The message from the Chancellor weakens Germany’s welcoming culture and will exacerbate the skills shortage in the coming years” he stated in an interview with “Handelsblatt”.
Merz’s recent statements, which conflate urban planning, migration policy and deportation practices, have drawn particular ire. He staunchly defended his remarks, demonstrating a reluctance to moderate his position despite the criticism. The core of the controversy lies in what economists perceive as a denial of Germany’s inherent nature as an immigration nation and a subsequent disregard for the contributions of individuals with migrant backgrounds that visibly shape the country’s cities.
While acknowledging the need for nuance in the ongoing debate, the Institute of German Economics (IW) echoed concerns about the long-term financial consequences. Knut Bergmann, head of the IW’s Berlin office, emphasized the critical distinction between skilled labor migration and humanitarian migration, observing that the current discourse frequently blurs that line. While conceding that Merz’s phrasing may have been inelegant, Bergmann affirmed that the Chancellor undoubtedly recognizes the value of well-integrated migrants in German society and the crucial role they play in the national economy.
This escalating dispute places significant pressure on the CDU and the governing coalition to address the potential backlash from businesses and investors alike, who are increasingly concerned about Germany’s perceived shift away from a welcoming and open-economy model. The debate is not merely about immigration policy; it represents a fundamental clash over Germany’s identity and future economic trajectory.