Germany's economy facing a crisis requires immediate reforms to enhance competitiveness, as per the recommendations from leading business managers.
In a collective appeal, leading business figures and Clemens Fuest, President of the Ifo Institute, have proposed far-reaching structural reforms for Germany. The proposed changes aim to reduce bureaucracy, improve digitalization, and make labor markets more flexible, addressing economic challenges and enhancing competitiveness.
Clemens Fuest, in a stark warning, emphasized that Germany will remain in crisis mode without such structural reforms. He advocated for a comprehensive and well-thought-out reform concept that transcends departmental boundaries, including deregulation of the capital market, more funding for start-ups and innovations, relaxation of dismissal protection, simplification of tax law, streamlined planning and approval procedures, and digitalization of administration.
Wolfgang Große Entrup, CEO of the chemical association VCI, added his voice to the chorus, urging the government to cut paperwork madness by 25 percent immediately. He noted that the location is still shaky, and the world is not waiting for Germany.
These proposed reforms complement the government's large fiscal stimulus and investment plans aimed at infrastructure, climate neutrality, and technological modernization. The EUR 500 billion Special Infrastructure and Climate Neutrality Fund targets seven pillars—transport, healthcare, energy, education, R&D, digitalization, and housing—along with relaxed debt rules for defense spending and greater fiscal autonomy for states.
Economists surveyed by the Ifo Institute underscored that without these structural reforms, competitiveness cannot be restored. They emphasized that fiscal spending alone is insufficient for long-term growth. Roland Busch, Siemens CEO, echoed this sentiment, stating that some industries previously successful in Germany are facing immense challenges or cannot be defended in Germany.
Other business leaders joined the call for reform. Belen Garijo, CEO of Merck, urged for politics to create the right framework conditions, advocating for smarter bureaucracy, fewer reservations, more agility, and more courage. Ola Källenius, CEO of Mercedes, demanded the federal government to decisively advocate for a reform of the Green Deal in solidarity with Paris, Rome, and Warsaw. Arndt G. Kirchhoff, President of the Association of Enterprises in NRW, highlighted that German companies are particularly burdened by high corporate taxes and social security contributions compared to international standards, excessive bureaucracy, and non-competitive energy costs.
Källenius also stressed that Europe must adapt to current realities or risk sacrificing its industrial leadership role due to over-regulation and stagnation. These business leaders view these reforms as essential to overcome challenges including high energy costs, stringent regulation, and investment conditions currently disadvantaging German industry. The call for structural reforms in Germany is a clear indication of the urgent need to address these challenges and restore competitiveness.
Clemens Fuest advocated for a reform concept that includes deregulation of the capital market, more funding for start-ups and innovations, relaxation of dismissal protection, simplification of tax law, streamlined planning and approval procedures, and digitalization of administration.
Economists emphasized that fiscal spending alone is insufficient for long-term growth, advocating for smarter bureaucracy, fewer reservations, more agility, and more courage in the business sector.
