- Representatives of large German companies are urgently asking the government for accelerated structural reforms.
- The German economy declined for two years in a row.
- The industry warns that a continuation of the current policy course will cause irreversible long-term damage.
- Uncertainty is growing for companies because of the war with Iran, tariffs, energy and inflation.
- Industrial unions demand lower taxes, reform of pensions, labor and social contributions.
Representatives of large German companies have again called on the government to quickly proceed with the reforms needed to boost economic growth. They took advantage of the opening of Hannover Messe, the largest trade fair in the field of industrial technology in the world. The DPA agency informed about it.
“We’ve reached the limit of what’s possible. We can’t take it anymore,” said Bertram Kawlath, head of the Association of German Machine and Equipment Manufacturers (VDMA), after the fair opened. “It is necessary for the current short-term crisis solutions to be replaced by well-thought-out structural reforms, the result of which will be permanent growth support,” Kawlath said.
Even the chairman of the German Association of Electrical and Electronics Manufacturers (ZVEI), Günther Kegel, called for the government to stop waiting for real reforms. Germany’s economy shrank two years in a row, in 2023 and 2024, and narrowly avoided another contraction last year when it grew by 0.2%, according to preliminary data. In addition, its situation is complicated by the current war in the Middle East, which is likely to have a significant impact on its development this year.
Kawlath warned that if politicians in Berlin and Brussels do not change course, there will be long-term damage to the industry that cannot be reversed. “Germany is too expensive and inflexible. Not even hard work or ingenuity can make up for it,” added the head of the VDMA.
According to representatives of industrial associations, the mood in German companies is falling, which is partially due to the government’s hesitation to proceed with radical reforms. “Risks from a war with Iran, US import tariffs, persistently high energy prices, higher inflation and disruption of supply networks only add to already high levels of uncertainty,” said Kawlath.
He called for reducing corporate taxes, capping social security contributions, relaxing the rules on weekly working hours, as well as increasing the retirement age depending on life expectancy. “Politicians must have the courage to demand something from the people,” Kawlath said, adding that they have so far implemented reforms too timidly.
