The recently released consensus decisions of Germany’s governing coalition are receiving a cautiously optimistic assessment from leading economic advisor Ulrike Malmendier, though she emphasizes they fall short of a transformative solution for the nation’s economic future. While acknowledging the potential benefit of initiatives like the industrial electricity price and power plant strategy, Malmendier, a member of the government’s council of economic advisors, stressed a critical element is missing: a sustained focus on fostering innovation-driven companies utilizing next-generation technologies capable of generating long-term growth within Germany.
Speaking to “Der Spiegel”, Malmendier expressed concerns that the government’s current strategy lacks the robust commitment needed to nurture these vital growth engines. While the individual plans demonstrate thoughtful intent, successful implementation, with a staunch dedication to growth, remains a significant hurdle.
“The government entered office with considerable expectations” Malmendier stated, “but it’s becoming apparent that opportunities aren’t being fully exploited as initially hoped”. She specifically challenged Friedrich Merz, the leader of the opposition Christian Democratic Union (CDU), to proactively utilize available funds to spur tangible investment and innovation.
Beyond incremental policy adjustments, Malmendier argued that Germany requires a “flagship project” capable of inspiring confidence and momentum within the business community. She suggested breakthroughs in areas such as industrial artificial intelligence or a collaborative EU initiative designed to establish a unified digital start-up market as potential examples. Ultimately, she underscored the necessity of a demonstrably bold initiative to counteract prevailing anxieties and revitalize Germany’s economic outlook. The current measures, while valuable, risk failing to deliver the necessary impetus for a genuine economic turnaround.