Habeck proposes a temporary suspension of the supply chain law.
The German Supply Chain Act was created to enhance human rights, but many experts argue that it results in additional red tape and higher costs for businesses. Vice Chancellor Habeck now suggests delaying the law. This has varied reactions.
Vice Chancellor Robert Habeck plans to put the German Supply Chain Act on hold for two years. This idea caught the attention of the traffic light coalition. While FDP leader Christian Lindner praised the plan, the SPD voiced their disapproval. Habeck hinted that the suspension of the law might be a part of the Ampel package for location improvement. Economists have consistently complained about the harsh documentation requirements and the difficulty in implementing the law.
Habeck requested a break due to the German economy's current stagnation resulting from the European directive. "That would be the best," he stated at the Family Business Day in the Berlin Adlon Hotel. Some firms aim to adhere to the specifications. The requirement could be revoked. This could provide relief. Habeck also indicated that it may take two to three weeks before a decision is made.
The SPD, Greens, and FDP's traffic light government intends to finalize a budget for 2025 by early July. Concurrently, they will present measures to improve Germany's economic location, which has become less appealing in recent years. Experts attribute Germany's decreased attractiveness to structural weaknesses, causing German businesses to make increasing investments abroad.
Lindner backed the Habeck proposal. "It would be a key step in the economic turnaround." It makes sense to suspend the German Supply Chain Act now and implement the European directive in a simplified form. FDP parliamentary group experts for small and medium-sized enterprises, Carl-Julius Cronenberg, added that it depends on Labor Minister Hubertus Heil to act swiftly. "With the suspension, we give small and medium-sized enterprises some breathing room." This would be appropriate in this economically strained period.
The law aims to make corporations responsible for violations in their supply chains, such as environmental regulation infractions or human rights abuses like forced or child labor. A spokesperson for the SPD-led Labor Ministry declared that exploitation should not be a business strategy. A bureaucracy-free implementation will always be the goal.
SPD labor market expert Martin Rosemann was astonished. "Is a prominent Green politician really willing to abandon human rights to gain favor with family businesses?" Decent supply chains are not a burden but a moral obligation. "The Economics Minister keeps talking about topics he's not in charge of," stated Rosemann. A spokesperson for the Economics Ministry noted that Habeck has openly expressed this position since the autumn. He wants to avoid duplicate reporting obligations from companies. Nonetheless, many Greens are in favor of the law.
