The German government’s proposal for the 2026 budget and subsequent financial plan to 2029, unveiled by Finance Minister Lars Klingbeil (SPD) this week, has prompted calls for reform from key economic and labor representatives. Concerns center on the projected level of new borrowing and the need to stimulate sustainable economic growth.
Helena Melnikov, Managing Director of the German Chamber of Industry and Commerce (DIHK), emphasized the link between a robust labor market and improved workplace conditions. She stated that reducing the financial burdens on both individuals and businesses is essential for future growth, advocating against further increases in those burdens. Melnikov highlighted that achieving manageable debt levels depends heavily on economic expansion, estimating that a return to two percent growth could generate an additional €40 billion annually through taxes and social security contributions. She underscored the crucial point that state spending should not consistently outpace economic growth to maintain a strong social safety net.
Steffen Kampeter, Managing Director of the Confederation of German Employers’ Associations (BDA), echoed this sentiment, urging for decisive reforms. He expressed optimism regarding the opportunity for constructive policy changes that could strengthen Germany and foster unity. Kampeter suggested a comprehensive future-oriented package encompassing both economic and social policy to provide a stable foundation.
Christiane Benner, Chairwoman of IG Metall, a major metalworkers’ union, voiced the anxieties felt by workers, noting a widespread sense of uncertainty and frustration. She called for a more dynamic and responsive approach, advocating for a sense of urgency and tangible progress. Benner proposed targeted tax increases on high-net-worth individuals, specifically citing a wealth tax and inheritance tax for the wealthiest as potential avenues for achieving meaningful change.