A growing wave of frustration is engulfing the German business community, with the President of the Federation of German Industries (BDI) warning that the government’s perceived lack of reform progress is actively jeopardizing the nation’s social model. Peter Leibinger, in a recent interview with Süddeutsche Zeitung, painted a stark picture of “extremely negative, sometimes even aggressive” sentiment amongst entrepreneurs and managers.
Initially, the economic outlook at the government’s inception last May was precarious, yet tinged with hope. That optimism has now evaporated, replaced by an unprecedented level of disillusionment. Leibinger characterized the current situation as the most severe economic crisis since the founding of West Germany, citing the longest recession, a sustained decline in industrial production since 2018 and sluggish productivity growth – leaving Germany trailing behind other major economies.
While acknowledging that comprehensive reforms require time and that some of the business community’s expectations of the governing coalition (composed of the Christian Democratic Union and the Social Democratic Party) may have been overly ambitious, Leibinger emphasized the crucial need for the government to project a sense of direction and progress. He specifically called for symbolic actions, such as temporary suspensions of regulations, to demonstrate responsiveness and understanding. The constant justifications for inaction – “1,000 reasons why it’s not possible in each individual case” – are proving counterproductive.
Leibinger also voiced significant alarm regarding the escalating competitive pressures from Chinese businesses, particularly within Germany’s flagship sectors like automotive, chemicals and mechanical engineering. He cautioned that Germany’s industrial core is under threat, as China effectively replicates German business models with greater efficiency and speed. Bureaucracy, comparatively short working hours and a lack of flexibility, he argued, are significant impediments to Germany’s competitive velocity. While expressing concerns about potential trade barriers and the contraction of global markets, Leibinger identified speed as the fundamental issue, stating that Germany is simply “too slow.
In a pointed rebuke of recent attempts by a family-owned business association to engage with the far-right Alternative for Germany (AfD), Leibinger unequivocally condemned the party’s polarizing rhetoric and divisive tactics. He asserted that parties predicated on societal division and the propagation of hate erode the foundation of Germany’s economic and social model. He personally declared racism and antisemitism “completely unacceptable” and affirmed his unwillingness to engage in dialogue with antisemites.