Peter Leibinger, President of the Federation of German Industries (BDI):

“The federal government’s record one year in is widely acknowledged to be poor. What is missing above all is an overarching vision for a reform agenda – a convincing description of the goal of an agenda for renewal. Such a vision could then serve as the basis for a plan for a successful Germany. None of this exists. This is the central failure of the first year of this government.

After this year, companies are deeply unsettled and, if they are investing at all, are doing so primarily abroad. Of the announced and urgently needed structural reforms, hardly any have been implemented so far. There is no overarching blueprint for concrete reforms that would deliver growth and competitiveness. This hesitation poses an existential threat to Germany as an industrial location.

A determined reform package must include a clear commitment by the state to administrative modernisation, cutting bureaucracy and fiscal consolidation. So far, the federal government has made little progress on these issues.

Isolated positive impulses do not replace a reform agenda. In specific areas, such as energy policy, the federal government has launched important legislation that could help. However, its impact is belated and insufficient given the scale of the structural challenges.

It may be that only the special fund for infrastructure and climate neutrality (SVIK) and increased defence spending are preventing Germany from slipping into recession this year. But public money alone cannot replace structural reforms. Long-term growth depends largely on private investment, which will only materialise under the right framework conditions.

Geopolitical crises increase the pressure, but they are not the cause of our home made economic weakness. The best protection against external shocks is a competitive home base. Global crises must not be used as an excuse for a lack of reforms.“