German business leaders say new government must act quickly to rescue stagnant economy

[February 25, 2025]  By DAVID McHUGH

FRANKFURT, Germany (AP) — Germany's businesses have been frustrated by government inaction on the stagnating economy.

Sunday's national election raises hopes of a stable two-party coalition of conservatives and center-left Social Democrats, with center-right leader Friedrich Merz as chancellor. But will it take the swift action business leaders are calling for?

Here's what leading economists and business figures in Germany are saying:

Christian Klein, CEO of business software maker SAP SE

“Tackling key issues, such as too much regulation, a lack of digitalization, and a slow economy, requires bold action.

"Germany needs a government that is open to more innovation, a competitive mindset, and removing excessive regulation that stifles progress and growth – and it needs it now.”

Luxury automaker BMW AG

“We expect from the future federal government that it quickly, comprehensively and sustainable improves the business environment for German industry facing global competition. That includes a competitive tax policy, the pragmatic reduction of bureaucracy and regulation as well as a competitive and business oriented shift in policy at the level of the EU.”

Peter Adrian, CEO of real estate firm Triwo AG and president of German Chamber of Industry and Commerce

“The high voter turnout (82.5%) shows that it’s not just the business community that senses the enormous importance of the decisions that lie ahead. A change of direction is overdue.”

Carsten Brzeski, chief of global macro at ING bank.

The new government must "focus on getting the economy out of its structural stagnation...if the main motivation of such a coalition is to prevent the (far-right) AfD from winning the next election – a likely scenario if the next government doesn’t succeed.”

The hands of Friedrich Merz, leader of the Christian Democratic Union (CDU), as he speaks during a news conference at the headquarters of Christian Democratic Union (CDU) party in Berlin, Germany, Monday, Feb. 24, 2025. (AP Photo/Martin Meissner)

Thorsten Groeger, head of the IG Metall industrial union in Lower Saxony and Saxony Anhalt regions

“Time is pressing, because more and more companies are cutting jobs and deciding against investing in our location here at home. Billions have to flow into energy security, modern streets and rail lines, high speed networks, innovative technologies, strong education, affordable housing and a welfare state that leaves no one behind.”

Peter Leibinger, head of the Federation of German Industries

“The parties must now prove that they have understood the seriousness of the situation and are prepared to act courageously, quickly and together: the dangerous downward spiral of missing investment and weak growth must be stopped.”

Holger Schmieding, chief economist Berenberg Bank

“Now for the bad news. Populist parties from the political fringes (AfD and the left-wing The Left) have garnered more than one third of seats together. The populists can thus veto any loosening of the debt brake enshrined in the constitution. At a time when it is crucial to raise spending for the military and Ukraine and ease the tax burden for workers and firms, Germany may struggle to find the fiscal space to do so.”

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