Following the first 100 days of the new German government led by Chancellor Friedrich Merz (CDU), business representatives have offered a critical assessment of its initial performance. Economist and President of the Ifo Institute, Clemens Fuest, stated that “permanent debt financing of arms expenditure does not make sense”. While acknowledging the government’s investments in infrastructure and defense, Fuest expressed concern that borrowing had exceeded reasonable limits.
Fuest further suggested that tax breaks for overtime, reduced value-added tax for the hospitality sector and early retirement schemes could have been avoided. He praised improved tax incentives for investment and initial steps to reduce bureaucracy – notably regarding the supply chain due diligence law – but cautioned that “much more needs to be done.
Federal Minister for Economic Affairs, Katherina Reiche (CDU), also urged further reforms. “Non-wage labour costs need to become competitive, energy prices must be affordable, we need to become more flexible in the labour market and we need to get bureaucracy under control” she said. “I suspect that obtaining permits is faster and simpler in other parts of the world.
Rainer Dulger, President of the Confederation of German Employers’ Associations, stated, “We are all waiting for the announced autumn of reforms”. He argued that Germany’s welfare state is in need of significant overhaul, requiring profound changes to pensions, unemployment benefits, healthcare and elderly care. “Less bureaucracy, more performance – and more net pay. That is the only way to get out of the economic crisis.
Christiane Benner, head of the IG Metall union, criticised the debate around extended working hours and social spending. “The narrative that Germans don’t work enough is irritating. We have more pressing problems. Our welfare state is worth more than it costs” she said, adding that the union welcomes the pension package as a first step towards reducing poverty in old age. However, she maintained that more needs to be done to ensure the long-term future of industry and its employees.
Frank Werneke, head of the Verdi union, praised the stabilization of pension levels and the strengthening of collective bargaining agreements through the “Bundestariftreuegesetz” (Federal Tariff Loyalty Act).