Resolute government required
“Pathetic”: Business reacts to the traffic lights being turned off
November 7, 2024 – 6:58 p.mReading time: 3 min.
Business associations are deeply concerned by the political crisis in Berlin. They demand that the German government be able to act and take a clear line.
The traffic light coalition also failed because of its economic policy. After the pandemic and inflation, the national economy is currently in stubborn stagnation. Because the Greens, FDP and SPD could not agree on a common antidote, the government fell apart. Industry associations have harsh words for this.
Hildegard Müller, President of the Association of the Automotive Industry, says to t-online:
“In an extremely difficult world and economic situation, Germany needs a government that approaches the challenges with unity and seriousness. The fact that the traffic light coalition is no longer able to do this has recently become clearer and more often on the open stage.” A common course was hardly visible anymore and “the uncertainty among citizens and the economy has become ever greater as a result.”
Müller emphasizes that “open trade issues with China and the uncompetitive state of Germany as a business location would require a federal government that is maximally capable of acting and determined as quickly as possible.” the VDA President demands that “new elections should take place as soon as possible in the interests of the entire country”.
The medium-sized business association explains to t-online that “the rapid implementation of the necessary economic turnaround” is now more important than “party political calculations”. The association welcomes early elections and claims that it would have been “economically wrong to suspend the debt brake”.
Eckhard Schwarzer, President of the SME Association, says: “A new beginning for Germany is overdue!” The new government should focus on growth and economic freedom. Chancellor Scholz should also ask the vote of confidence immediately because “given the serious economic situation in Germany and our international challenges, we cannot afford to stand still for months.”
In a press release, the Federal Association of Wholesale, Foreign Trade and Services (BGA) describes the problem graphically: Germany is in the middle of a “fundamental structural change” while ”the poles of the global economy between the USA and China are being readjusted.” “Instead of steering our country through these difficult seas, the Chancellor is giving up the steering wheel. The self-proclaimed progress coalition has suffered shipwreck,” explains the export association. “Every additional day with this federal government is a lost day. We demand new elections as quickly as possible,” says BGA President Dr. Dirk Jandura.
Astrid Hamker, President of the CDU’s Economic Council, believes that Germany cannot afford a government “that drags its feet.” Her analysis of Germany as a business location is devastating: “Last in terms of growth, capital flight and world champion in regulation, electricity prices and taxes,” she tells t-online. A liberation strike is now necessary, like this Christian Lindner would have claimed him with his economic paper. “I find the Chancellor’s reaction to this to be pathetic: they don’t want to change course in terms of content and then instead follow suit on a personal level,” says Hamker.
Total metal president Stefan Wolf recently called for new elections in an interview with t-online. He is correspondingly pleased with the current development. A liberation blow for the economy is needed, he says. In his opinion, Lindner and the FDP have made the right suggestions. “But the SPD and the Greens were obviously not even prepared to seriously discuss it,” said Wolf. “The fact that the FDP has now left the federal government after the events of yesterday evening is, in my view, only logical and the absolutely right consequence.”
Industry President Siegfried Russwurm is also calling for stable conditions quickly. “In view of the global political situation and the poor economic development in Germany, we now need a new, effective government with its own parliamentary majority as quickly as possible,” says the President of the Federation of German Industries (BDI). “Continued uncertainty about who governs Germany and with what program is damaging the country and the business location.”
Interview between Time.news Editor and Economic Expert
Time.news Editor: Good evening, and thank you for joining us today. We’re witnessing significant unrest in Germany’s political landscape, especially with the recent collapse of the traffic light coalition. To help us unpack this situation, we’ve invited Dr. Klaus Werner, an esteemed economist and political analyst. Dr. Werner, the political crisis in Berlin seems to be affecting the economy severely. Can you share your thoughts on this?
Dr. Klaus Werner: Good evening. Yes, the situation is quite concerning. The traffic light coalition, made up of the Greens, FDP, and SPD, was expected to unify their approaches to economic governance. However, their inability to establish a cohesive economic policy—especially in the wake of the pandemic and ongoing inflation—has led to stagnation. Business leaders are right to express concern; they require decisive action from their government.
Time.news Editor: Indeed, Hildegard Müller, the President of the Association of the Automotive Industry, stated that Germany needs a resolute government to navigate these tough times. What do you think about her assertion that “the uncertainty among citizens and the economy has become ever greater as a result”?
Dr. Klaus Werner: That’s a poignant observation. Uncertainty can be highly detrimental to both consumer confidence and business investments. When businesses do not have clarity regarding regulatory frameworks or economic policy, they tend to hold back on investments. This results in a vicious cycle of stagnation. Müller is effectively highlighting the very real need for a government that can act swiftly and decisively.
Time.news Editor: Following the fallout of the coalition, Müller called for new elections, arguing the country deserves a government that is capable of confronting its challenges. How important are these early elections in your view?
Dr. Klaus Werner: Early elections could provide a much-needed reset for the German government. Right now, the political stalemate hinders not just economic decisions, but also the country’s overall response to global economic shifts. Many sectors, as noted by Müller, require immediate attention, particularly concerning trade relations with China and enhancing Germany’s competitiveness on the global stage.
Time.news Editor: Eckhard Schwarzer from the SME Association also echoed that sentiment, stating a “new beginning for Germany is overdue,” advocating for growth and economic freedom. In your opinion, what kind of policies should a new government prioritize?
Dr. Klaus Werner: The new government needs to focus on policies that stimulate growth. This includes fostering an environment for innovation, enhancing infrastructure, and providing support for key sectors, especially medium-sized enterprises that form the backbone of the economy. Additionally, a re-evaluation of Germany’s position in the global market, particularly with the U.S. and China, cannot be overlooked.
Time.news Editor: The Federal Association of Wholesale, Foreign Trade and Services emphasized that Germany is in a “fundamental structural change.” What challenges does this present to the incoming government?
Dr. Klaus Werner: The primary challenge is adapting to the global economic environment characterized by rapid changes and realignments, especially with the tensions between major economies like the U.S. and China. Germany must find a way to be agile, steering through these turbulent times while ensuring that domestic industries remain competitive. Furthermore, balancing sustainability goals with economic growth will also be pivotal.
Time.news Editor: Dr. Klaus Werner, thank you for your insights. As Germany navigates these turbulent waters, it’s clear that decisive action and clear communication from leadership will be crucial in restoring confidence among the populace and the business community. We look forward to your continued analysis of this evolving situation.
Dr. Klaus Werner: Thank you for having me. It will certainly be interesting to watch how the upcoming months unfold as both political and economic dynamics continue to shift in Germany.