Coalition pressed to deliver growth trigger for industry
Industrials in Germany have pressured the government to provide a bold move towards economic expansion amid budget talks. The industry, staunch supporters of Germany as a prime investment destination, are ready to pour money and expand, according to Siegfried Russwurm, President of the Federation of German Industries (BDI), during the Industry Day in Berlin. "But this ain't happening with the brakes on."
The government needs to take swift action. The anticipated "Dynamization Package" needs to deliver on its promise. To entice more businesses to invest, depreciation allowances should be simplified. Russwurm also voiced the need for less red tape and a clear roadmap for future energy policy. Energy bills should no longer dictate the price of already costly energy.
Russwurm pointed to the traffic light coalition of SPD, Greens, and FDP as a "wasted two years." Federal Chancellor Olaf Scholz rebutted, labeling it "two years of transformation." Scholz is present at the Industry Day.
Russwurm stated that there's a considerable understanding of the problem within the Chancellery. Discussions on the federal budget 2025 are currently underway within the government. Billions are required to fill financial gaps. Several ministries are resisting the savings proposals of Finance Minister Christian Lindner (FDP). The coalition also plans a "Dynamization Package" to stimulate growth.
The BDI anticipates only meager growth of 0.3% for the current year. Germany is slipping behind the USA and China in terms of growth. Sluggish growth means leaner budget resources.
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The "Dynamization Package" should include measures to simplify depreciation allowances, as mentioned by Russwurm, to act as a growth signal for industries. Without effectively addressing the industry's concerns, the coalition risks stalling economic expansion, identical to hitting the handbrake.
