2024-10-04 10:40:10
The traffic light bosses have agreed on a package for more growth. Labor Minister Heil, who has to implement individual measures, is stepping on the brakes.
Germany’s economy is in dire straits. While almost all 20 major industrial nations are growing, the Organization for Economic Cooperation and Development (OECD) has recently lowered its forecast for Germany again, to a mini-plus of just 0.1 percent this year. The leading economic research institutes in Germany are even expecting a second year of contraction in a row, recently forecasting a decline of 0.1 percent for 2024.
The federal government wants to counteract this downward trend and decided on a “growth initiative” in the summer. A total of 49 measures with numerous sub-items and changes to the law are to be launched parallel to the ongoing budget discussions in order to improve the framework conditions for companies in Germany. The goal: With the federal budget resolution at the end of the year, everything should be finalized and ready so that the ideas can have their full impact in 2025.
But now it turns out: Several points in this economic package threaten to come later – because Labor Minister Hubertus Heil (SPD) is stepping on the brakes. Specifically, according to t-online information, it is about the planned relaxation of the Working Hours Act and the Supply Chain Act.
In the first case, Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) agreed that employees can work longer than the currently legally possible eight or ten hours per day if they want. This is relevant, for example, in the catering industry, where people often work late into the evening and where there is an increasing shortage of workers.
The growth initiative’s paper states literally: “The federal government will create a limited opportunity to deviate from the currently existing regulations of the Working Hours Act with regard to maximum daily working hours if collective agreements or company agreements based on collective agreements provide for this.” This should apply for a limited period of time and the effects will be assessed later.
With regard to the supply chain law, which imposes numerous reporting obligations and a lot of bureaucracy on companies, the traffic light bosses have decided to implement the EU supply chain directive more quickly – but to clarify the obligations resulting from it at the latest possible date, namely from 2027 at the earliest. That would mean that from next year around two thirds of the companies in Germany would no longer be subject to the current rules of the German Supply Chain Act, which currently still apply to them. Larger companies should also be able to choose whether they fulfill the reporting obligations of the Supply Chain Act or the sustainability reporting obligations.
However, Heil, who is responsible for both things, is now said to have announced that implementation would require more time. It is therefore unclear whether the Bundestag can actually pass all the changes as law by the end of the year.
This shakes the core of the agreement between Scholz, Habeck and Lindner. Because: The growth package is closely linked to the adoption of the federal budget in December because the budget plan already includes additional tax revenue from greater growth. In short: If the growth package does not come or only comes later in parts, the budget holders in the Bundestag will not be able to plan for the higher tax revenues at their adjustment meeting on November 16th. Then the billion dollar hole in the budget would be even bigger.
In response to a t-online request, the Ministry of Labor said that it was “working flat out on the implementation of the growth initiative” and that some things had already been initiated. “On September 4th, the cabinet decided on the first measures to make longer working hours more attractive and is working hard to implement further growth-promoting initiatives, for example in the area of labor market policy and sanctions on citizens’ benefits.”
The specific changes to the Working Hours Act are currently still being worked on. “The plan is to present a draft bill this year.” Which translates to something like: There can still be a bill that has been voted on and passed within the cabinet and will then be discussed in the Bundestag before the end of the year – but it doesn’t have to be. In fact, the amendment to the Working Hours Act could take a little longer.