The German economy could shrink for the second year in a row. The FDP parliamentary group vice-president therefore warns the SPD and the Greens against “ruining” the legislative package for more growth.
In view of the weak economic forecast, which Economics Minister Robert Habeck (Greens) will present in the early afternoon, the FDP is pushing for faster implementation of the traffic light law package for more economic growth in the Bundestag. “The poor economic data shows the urgent need for an economic turnaround,” said FDP parliamentary group vice-president Christoph Meyer on Wednesday on t-online.
“Anyone who delays or blocks the implementation of the growth initiative, like the Greens and the SPD Left, is doing Germany harm,” the liberal continued. One thing is clear: even more than what was planned is necessary. “We need further measures for people and companies beyond the growth initiative.” These included “more relief, more incentives for private investments and more reductions in bureaucracy.”
Among other things, a “business-friendly change to the German supply chain law” is conceivable here. Meyer: “The SPD, the Greens and the federal states must not talk anything down or talk it out of the water, after all it’s about Germany’s economic future.”
Habeck will present the federal government’s new economic forecast in Berlin on Wednesday. It is expected that the forecast will be lowered and the government now expects economic output in Germany to shrink in the current year.
Habeck had originally expected a slight increase in gross domestic product of 0.3 percent for 2024 – now a decline of 0.2 percent is expected. For 2025, Habeck expects an increase in gross domestic product of 1.1 percent. In the spring, the government predicted an increase of 1.0 percent for 2025.
The numbers are the basis for the upcoming next tax estimate. Lower tax revenues than previously predicted and higher spending on social security could put a strain on the traffic light coalition’s budget negotiations. At the same time, however, lower growth prospects mean that higher borrowing is possible due to the debt brake mechanism.
In view of the economic downturn, the federal government is planning the “growth initiative” addressed by Meyer, a legislative package originally with 49 measures intended to stimulate the economy. Among other things, improved tax depreciation for companies is planned so that they can invest more.
The government expects that the growth package can lead to additional growth of more than half a percentage point next year. Leading economic research institutes have recently expressed skepticism as to whether the growth package will provide this impetus.
One reason for this: Many measures have not yet been implemented. The traffic light government wants to initiate a large part of the laws and measures in these weeks and submit them to parliament for final consultation. The aim is for the “growth initiative” to be completed by the final adjustment meeting for the 2025 federal budget in November at the latest, as the budget has already been partially calculated on the basis of higher tax revenue resulting from the package.
Recently, however, individual ideas from the growth package have been repeatedly questioned, such as tax advantages for foreign skilled workers as early as the summer. The recently highly controversial bonus of 1,000 euros for long-term unemployed people who take up a job and still have it after a year is part of the “economic initiative” and is now in jeopardy.
According to t-online information, other projects could take longer than the end of the year before the government can initiate them. This includes, among other things, easing of the Supply Chain Act and the Working Hours Act.
According to information from government circles, around half of the 49 measures have currently been initiated. The final cleanup meeting of the Budget Committee is scheduled for November 14th.