CEOs Warn Germany Needs Urgent Turnaround From Next Government #NewsGerman

(Bloomberg) — German corporate leaders urged the next government to move rapidly to unlock investment and get Europe’s largest economy growing again.

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The heads of Commerzbank AG, RWE AG and Bilfinger SE pointed to structural issues such as high energy costs and red tape that will need to be addressed after the Feb. 23 election. Threats by US President Donald Trump to impose tariffs on the European Union underscore the urgency to act on reforms.

“There’s hope if we have a stable government after the election, we will quickly see a shift in sentiment and we will also see investments,” Commerzbank Chief Executive Officer Bettina Orlopp said Thursday at a Bloomberg panel discussion in Frankfurt.

After two consecutive years of contraction, Germany has morphed from Europe’s economic engine into a laggard. The government last week slashed its growth forecast for this year to 0.3% from 1.1%, while unemployment jumped to the highest level in more than four years in January.

Bilfinger CEO Thomas Schulz said that the falling investment seen during Angela Merkel’s 16 years in power worsened under Olaf Scholz, adding that politicians failed to take the action needed to boost corporate spending on new staff and equipment.

“And that should be a warning signal to everyone,” he said, adding that there needed to be deeper cooperation between the state and companies. “We can really change the tide and get back into growth.”

The changes that company leaders are pushing the next government to enact could prove to be a challenge. While the Christian Democrat-led conservative bloc is the leader in the polls with a pro-business agenda, a failed effort by Friedrich Merz — the frontrunner for chancellor — to push through migration legislation last week with the support of the far-right Alternative for Germany revealed deep divisions with other mainstream parties.

Scholz’s Social Democrats and the Greens — which might be needed for a centrist coalition — vigorously opposed the initiative, highlighting the complex task of finding common ground to tackle structural issues such as crumbling infrastructure and high energy costs.

Economic data is unlikely to show signs of improvement this week, with industrial production for December — due Friday — expected to show a decline. That day will also see the publication of 2024 trade figures, a particularly sensitive data point at a time when demand from China has slumped.

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