War, energy prices, inflation, bureaucracy, supply chains, skilled workers, climate change: the list of problems facing the German economy is getting longer and longer. Demands for the future are getting louder.
The situation of industry, trade and business is extremely critical due to unnecessary bureaucracy, high taxes and expensive energy, according to the major German business associations.
A large number of handicaps currently have to be dealt with, said the President of the Federation of German Industries (BDI), Siegfried Russwurm, before the traditional top-level discussion of the four major German business associations with Chancellor Olaf Scholz (SPD) at the Munich Crafts Fair. Despite the current crises, Germany needs a long-term strategy again in order to remain successful worldwide.
“Energy costs are still high. But we also have to contend with an obsession with regulation, which means that we often write more paper than we can really get to the front,” emphasized Russwurm. At the same time, Germany has the highest taxes in a global comparison, which makes the global competitiveness of industry “quite difficult”. High inflation is also “hurting”.
With a view to the federal government’s crisis policy, Russwurm explained that “we had done quite well together, both in the pandemic and in the short term in the consequences of the Russian war in Ukraine”. In perspective, however, that is not enough, a “long-line strategy” is also needed and Germany “still has a lot of catching up to do” here.
This includes a secure energy supply, a reduction in bureaucracy and a noticeable tax cut: “If we in Germany could at least bring taxes down to an average in Europe, that would help a lot,” said Russwurm.
Employer President: Situation “difficult”
The President of the Confederation of German Employers’ Associations, Rainer Dulger, also described the economic situation in Germany as “difficult”. Like Russwurm, he called for rapid debureaucratization and lower energy prices. In addition, any increase in social security contributions would be a “wrong signal”.
DIHK President Peter Adrian explained: “We were able to overcome this energy crisis without a gas shortage, which saved us from a major crash.” The federal government’s crisis policy worked, but everything must continue to be done to ensure the international competitiveness of the German economy. At the same time, ways must be sought to decarbonize the economy and eliminate the shortage of skilled workers.
The Central Association of German Crafts (ZDH) complained about the existing documentation requirements and other regulations. These would hinder the work of the craft and make it more expensive, said craft president Jörg Dittrich to the Bavarian radio. “We are so bogged down with bureaucracy that we can no longer guarantee the implementation of the political goals that we are tackling.”
Catalog of demands for the chancellor
The Chancellor’s traditional top-level talks with the four leading associations of German business take place every year at the Munich Crafts Fair. In line with the demands, the Scholz business associations presented a joint statement in which they summarized the situation and their demands. “The loss of industrial value creation is no longer a theoretical danger. It is already happening,” the two-page statement said. Therefore, companies need a perspective “beyond the pure crisis mode” that “encourages”.
Among other things, the tax burden on corporations must be reduced from around 30 percent “as quickly as possible” to an internationally competitive level of 25 percent. Planning and approval procedures must be accelerated: “Where processes take years or even decades, the intended halving of the procedures is not enough. The aim must be to shorten them to a few months,” the statement continues. Furthermore, there is a need for more flexible working time models, including maximum weekly working hours, modern rest time regulations and significantly faster procedures for the immigration of workers.