The Federal Association of German Industry demands from the Federal Government rapid fundamental reforms. “We need a comprehensive reform package before the summer,” said BDI CEO Tanya Gönner the news agency dpa. “The time window is short.”
Germany as a business location is under pressure like never before in post-war history. The Iranian crisis is making the situation even worse. “Only if the government sends a clear signal with decisive structural reforms will Germany be able to overcome the weak growth.”
Industry association promotes reduction in labor costs
“The supply of workers is becoming structurally tighter – and that is slowing down the impact of government investment programs,” says BDI head Gönner. The federal government must reduce labor costs and increase productivity. Fundamental reforms are crucial Social Securityin order to limit additional wage costs and avoid false incentives. The sequence has to be right so that investments can have their full effect: increase the labor force participation of older people and women, expand qualifications, make labor markets more flexible and link the retirement age to life expectancy.” Gönner also spoke out in favor of a reduction in corporate tax from 2026.
The federal government has announced fundamental reforms, for example in health, so that costs do not get out of control. A commission of experts had made proposals for billions in savings. It is also about reforms in care and pensions. The focus is also on tax relief via a Income tax reformhowever the question of counter-financing is unclear. Gönner praised the fact that the federal government is now working “very concretely” on a reform package. In recent weeks, she has noticed a real willingness in the government to work together with this goal. This requires a willingness to cooperate across political camps.
The consequences of the Iran war are slowing down the German economy
The consequences of the Iran war are slowing down economic growth in Germany. Leading economic research institutes have recently more than halved their forecasts for the German economy. For this year they only expect an increase in gross domestic product of 0.6 percent. According to the report, an increase of 0.9 percent is expected for 2027.
It has been closed since the Iran War began at the end of February Oil price jumps and gas came. The German economy is already in a difficult situation after years of slump. Many companies are holding back on investments.
A year ago, the Bundestag approved a debt package – called special funds – on a record scale: 500 billion euros are to flow into infrastructure and climate protection in the coming years. Whatever promotes growth and facilitates private investment must have priority, said the BDI director, otherwise state money will be wasted. The association has that Special assets from the outset only supported on the condition that it was accompanied by comprehensive structural reforms. “To date, these have not been addressed in the necessary form and speed.”
The President of the Federal Audit Office had control over the use of the special funds criticized as a “marshalling yard”.. Several former members of the Bundestag FDP According to their own statements, they are because of the special assets taken to the Federal Constitutional Court.