Lower energy costs, lower taxes, more financial incentives for investment, more flexible labor laws, an end to social security payments and above all, less bureaucracy — that is what German businesses are demanding from the country's next government.
"The economy is shrinking. Unemployment is growing. Germany has become unattractive for investors," that is how Rainer Dulger, president of the Confederation of German Employers' Associations (BDA), summed up the situation at the last employers' conference in late October 2024.
Well-trained and specialized employees have become rare. Regulations and bureaucracy, said Dulger, have grown at a rate proportional to the growth of other burdens heaped on companies — such as rising employment and production costs. Germany, he said, is no longer competitive globally.
Germany's economic strength depends heavily on industry, which is responsible for roughly a quarter of GDP. After two years of recession, the Federation of German Industry (BDI) calculated that production output is now far lower than it was five years ago. The result: Less is produced and built in Germany, and less is bought and consumed.
In their latest annual advisory report to the German federal government's Council of Experts, economists documented a continuing downturn across all sectors of the economy. Especially disconcerting are indications that fewer German products now find their way abroad.
Businesses packing up and leaving Germany
Businesses are demanding a significant reduction in energy prices to make Germany competitive again.
But at the top of the corporate wish list is an even greater reduction in the price of bureaucracy. According to the Ifo Institute, a Munich-based economic research outfit, German businesses spend €65 billion ($68 billion) annually on compulsory documentation and reports related to planning and certification processes.
The mood in Germany's businesses is grim, and uncertainty about economic development is growing. Rather than investing at home, many companies are now looking for more attractive production bases abroad. In response to a recent BDI survey, roughly one-third of businesses said they had already offshored research and development operations. This caused BDI president Peter Leibinger to warn that Germany's very "foundation" as a place to base businesses was under threat.
An alliance of some 100 economic and lobbying associations is calling for nothing less than a complete economic policy turnaround from Germany's next government. The group is calling for a day of nationwide action on January 29. On that day, businesses across the country will draw attention to their problems and demands, with a major demonstration to be staged at Berlin's famous Brandenburg Gate.
Organizers say businesses will use the demonstration to send an "SOS" to politicians.
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