As parliamentary discussions on the upcoming budget commence, leading representatives from German industry are urging the government to prioritize structural reforms alongside planned increased spending.
Helena Melnikov, Deputy CEO of the German Chamber of Industry and Commerce (DIHK), emphasized that while the planned new debt provides the government with significant financial flexibility, it also carries a substantial responsibility. She stressed the need for the funds allocated from the infrastructure fund to be strategically deployed, efficient and geared towards fostering economic growth. “Only when additional spending is utilized effectively and accompanied by structural reforms can we strengthen economic dynamism and ensure the future burden of interest and repayments remains manageable” she stated in remarks to the Redaktionsnetzwerk Deutschland.
Melnikov called for a decisive course of reform. She argued that planning, permitting and procurement processes must be considerably accelerated, bureaucracy significantly reduced and the critical shortage of skilled workers effectively addressed. The improvement of the investment climate for the private sector, which accounts for approximately 90% of all investment in Germany, was also deemed essential. Melnikov noted that following recent disappointments, such as the reduction of the electricity tax, businesses are hoping for prompt relief and a restoration of confidence from the new government.
Christoph Ahlhaus, CEO of the Federation of German SMEs (BVMW), voiced criticism of the previous coalition government’s economic policies. He expressed concern that the measures taken have not demonstrably revitalized Germany’s appeal for both domestic and foreign investors. Ahlhaus specifically called for tax reductions, relief from energy costs and reforms to the social welfare system. He cautioned that policymakers must not neglect the needs of Germany’s 1.8 million SMEs, which form the backbone of the national economy. The focus now, according to industry leaders, should be on securing Germany’s future economic competitiveness.