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Business

Business Leaders Criticize German Government

With just a few months left to go before the September national elections, leading German business figures have come down hard on the Social Democrats’ economic reforms, or lack of them.

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Is Chancellor Schröder to blame for poor economic growth?

In the last four years, the red-green government led by Gerhard Schröder has shown too little reform initiative, say key German business leaders. They point to the growing number of unemployed and the stagnating growth rate as indicators that the Social Democrats (SPD) and Greens have not done what they set out to do, namely improve the economy.

According to Commerzbank director Klaus-Peter Müller in an interview with the "Welt am Sonntag", the federal government has fallen far short of achieving the goals it set for itself. This is especially obvious in the job market, he says.

Werner Wenning, chief executive of Bayer AG, agrees and says the government has done far too little to push through necessary economic reforms. Schröder and the SPD could have done more to reduce various financial burdens placed on German companies, such as high taxes, which make it difficult for them to compete internationally. Jürgen Strube, director of BASF, criticizes the government for halting the initial economic growth at the beginning of the administration. "In terms of the reform of the job market and the health system, we should be much further along," he insists.

RWE director Dietmar Kuhnt is even more blunt in his critique of the current government. He points out that the economic growth rate of 0.6 percent is one of the lowest in all of Europe. "It hurts us now, that the politicians have once again failed to lay the groundwork for a lasting economic growth," Kuhnt says.

Is the CDU/ CSU a better alternative?

In the last four years, the opposition Christian Democrats (CDU) and their sister party the Christian Social Union (CSU) have not succeed in presenting a viable alternative for economic growth, says Wenning. But he adds, "since the beginning of this year the CDU/CSU has begun to establish a firmer position."

Wenning, like several other German business leaders, is concerned that neither the CDU nor the SPD really has what it takes to get the country back on the right track.

BASF director Strube is of the opinion that the Union is doing the right thing by focusing fiscal policy reform on medium-sized companies. On the other hand, he worries that the CDU/CSU might differentiate too much between large businesses and small ones when it comes to tax policies. He’s also not sure where the CDU/CSU plans to get the money to finance its proposed reforms such as tax breaks for the mid-size companies. The party’s election platform leaves too many loopholes open.

Working for Germany’s future

On Monday, several managers from leading German companies, such as Deutsche Bank, Siemens, and BASF, will present a seven-point plan for reforming Germany’s social welfare program, education system and tax system. Grouped together under the title "Initiative for Germany", the managers want to send politicians a wake-up call to do more to get the economic ball rolling.

"It’s all about establishing the points that have a far-reaching influence on the future development of the land," the group told the "Frankfurter Allgemeine Sonntagszeitung" on Sunday. The managers blame the politicians in the two big parties for blocking reform efforts out of fear of risking votes in the upcoming election.

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