According to a recent poll conducted by the Association of Family Entrepreneurs, the majority of medium-sized family businesses will not afford the tax-free relief bonus of up to 1,000 euros for their employees. Speaking to the newspaper, the association’s president, Marie-Christine Ostermann, stressed that many entrepreneurs are unable to cope with such costs after years of recession. She noted that 57 percent of businesses do not intend to pay the bonus, 31 percent only partially, and only twelve percent will pay it entirely. Ostermann criticized the government for claiming that these measures offer relief, yet pushing the costs onto companies-especially during the longest economic downturn since the Second World War.
Focusing on energy issues, Ostermann demanded a completely technology-open policy, one that would permit the construction of small nuclear power plants. She stated that it is unacceptable for the solar economy to continue receiving subsidies after 30 years. “We explicitly support Minister of Economics Reiche in ending this cycle of subsidies, and we are also in favor of ending the ban on nuclear power” she added.
Additionally, Ostermann criticized the economic policies of Federal Chancellor Friedrich Merz (CDU). While acknowledging that geopolitical crises complicate the situation, she argued that because other developed European nations are still seeing growth, most problems are domestically created. She insisted that these issues could be solved by implementing structural reforms: lowering taxes and energy costs, modernizing social security systems, and drastically reducing bureaucracy. Although Merz has made many promises, she argues that tangible relief is not yet visible, and in some cases, companies are facing increased burdens. Finally, she noted that while Merz has performed a good job in foreign policy, he must now prove himself as an economic minister to finally implement the necessary economic transformation.
Regarding Merz, Ostermann expressed mixed feelings, stating that his personal relationship with the economy has always been good, giving her hope and trust due to his apparent understanding of the market. However, she expressed deep disappointment after one year, pointing out that almost nothing has been implemented, and the situation is worsening. She observed rising bankruptcies, job losses, and investments moving abroad, warning that declining sectors of the middle class cannot and should not be accepted.
When asked about an early end to the government, Ostermann suggested that Merz still has the potential for leadership, but he must first cement his position with the SPD. If deep reforms fail to materialize due to blockages from coalition partners, she stated that the Chancellor might be compelled to jeopardize everything by calling a vote of confidence in the Bundestag. While acknowledging this would be dramatic, especially following the failure of the coalition governments that preceded it, she concluded that without major economic restructuring, Germany’s decline would continue anyway. She suggested that an issue of confidence could push the SPD to shift its focus from demand-side to supply-side economics.
Concerning pension reform, Ostermann insisted that the system must be sustainably viable for younger generations. It is crucial to reverse the tendency toward early retirement movement by implementing noticeable deductions for premature retirement and providing incentives for longer working lives. She called for the retirement age to be tied to life expectancy, and for the sustainability factor to reassert itself to curb rising pensions. To prevent employee pension contributions from continually increasing, she proposed withdrawing or restructuring the financing of benefits like the mother’s pension or those granted at age 63.
Regarding proposed tax reform, Ostermann stressed that an urgent income tax reform is necessary to make work more rewarding. However, she insisted that the state must save money rather than organizing adequate funding through further increased burdens on the wealthy. She warned that a higher top marginal tax rate would severely impact the middle class, arguing that for many family-run businesses, income tax is practically corporate tax. She noted that overall tax burdens are already very high, acting as an investment brake, and that a higher wealth tax would feel like an investment tax during a crisis.
To cover the cost of reforms, Ostermann proposed immediately cutting all subsidies, suggesting a blanket reduction starting at 10 percent of the federal budget’s annual subsidies and financial aid package, which totals almost 80 billion euros. Finally, she reiterated the need for the coalition to uphold its promise to cut 8 percent of all federal staff positions during this period, claiming that no progress has been visible to date.