German coalition must find joint response to economic malaise, finance minister says

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By Christian Kraemer, Maria Martinez and Rene Wagner

BERLIN (Reuters) – Germany’s ideologically disparate coalition of Social Democrats (SPD), free-market Free Democrats (FDP) and Greens will have to find joint answers to the economic malaise in Europe’s biggest economy, Finance Minister Christian Lindner said on Tuesday.

Headed by Lindner, the FDP organised their own business meeting on Tuesday, the same day Chancellor Olaf Scholz invited business groups to the chancellery for an industry summit.

Lindner said he had spoken with company representatives about structural challenges for the German economy and that their proposals would be incorporated into a consultation process.

“The economic policy debate is where it belongs: right at the top of the agenda,” Lindner said on social media platform X. “We have no time to lose.”

The focus of the government has shifted towards reviving an economy that is set to contract for the second year in a row. Disputes over how to do this have put pressure on the coalition.

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“A coherent overall concept from the federal government with a perspective up to 2035 is urgently needed, because the decisive factor is not what is announced, but what is actually implemented,” said Joerg Dittrich, president of skilled crafts association ZDH, which attended Lindner’s gathering.

He identified excessive bureaucracy, energy policy, exploding non-wage labour costs and a massive need for skilled workers as the main challenges in Germany and said they require “a holistic and coordinated economic policy”.

Reinhold von Eben-Worlee, from the association of family entrepreneurs said that Germany’s “Mittelstand” suffers from “a heavy rucksack” of high taxes and social security contributions as well as a lot of bureaucracy.

With that, winning a economic marathon is not possible, he said. “This rucksack is too heavy.”

“We need to change course quickly, investments need clarity and confidence in a stable course,” said Stephan Hofmeister, president of the liberal professions association BFB. “This requires coordination within the entire federal government.”

The employers’ association president Rainer Dulger said that politicians must once again focus on the competitiveness of Germany as a business location.

The government’s growth package must be passed as soon as possible by the two houses of parliament, Dulger said, adding: “Germany can do this.”