Business Leaders Urge Coalition to Reassess Economic Measures Amid Ongoing Crisis

A collective of 65 business leaders has issued a formal letter to the leaders of the Union and SPD parties, expressing deep concerns regarding the coalition negotiations currently underway. The signatories argue that the proposed policies on social issues, climate, and migration could exacerbate the ongoing economic downturn in Germany, which is already enduring the most prolonged recession since 1945.

The letter highlights fears that if measures concerning minimum wage, pensions, basic income, and immigration are enacted as discussed, the recession could worsen significantly. The business leaders stress that the outcomes of the negotiations could lead to companies relocating investments abroad or ceasing operations altogether, resulting in a detrimental impact on the job market and overall economic stability.

Moreover, they point out that Germany is at risk of losing its most skilled professionals, either through retirement or migration. To counteract these trends, the business associations are calling for tax reductions to align with the European Union average, lower social security contributions, and the distribution of climate protection revenues generated from carbon trading. Additionally, they are advocating for a reduction in bureaucratic regulations.

The letter's authors implore CDU leader Friedrich Merz and SPD leader Lars Klingbeil to refocus efforts on revitalizing Germany's economy, emphasizing that the nation's economic health is crucial not only for social welfare but also for environmental and climate initiatives. They argue that without a stable economic foundation, the prospects for effective governance diminish significantly.

Oliver Zander, the head of the Gesamtmetall association, emphasized the urgency of the situation, stating that if the new government fails to prioritize economic growth, Germany's decline will continue unabated. The sentiment resonates with others in the business community who believe that increasing state debt will not resolve economic challenges. Marie-Christine Ostermann, head of the Family Entrepreneurs, criticized the high levels of government borrowing, urging the coalition to restructure its approach to maintain Germany's competitive edge.

Germany has been in a recession since 2023, with a reported decrease in GDP by 0.3% that year, followed by an additional decline of 0.2% in 2024. This period of economic stagnation is unprecedented in the post-war era, raising alarms among economists and business stakeholders alike.