German Businesses Voice Strong Dissatisfaction with Government Economic and Social Policies

A recent Forsa survey conducted for the Federal Association of German Employers' Associations (BDA) reveals widespread dissatisfaction among German businesses with the current coalition government's economic, social, and labor market policies. The government, formed by the Union and SPD, is facing criticism, particularly over pension packages and social state reforms.

According to the survey, 77% of companies expressed dissatisfaction with the government's overall performance, with small to medium enterprises (50 to 249 employees) showing even higher discontent at 83%. Economic and labor policies drew sharp criticism from 82% of respondents overall, climbing to 89% among medium-sized firms. Employer president Rainer Dulger highlighted the lack of promised reforms despite rising national debt, stating, "The debts are there, but the reforms are not."

The survey included around 1,000 companies across sectors. Some, like hospitality, showed slightly less dissatisfaction, helped by a recent VAT reduction. However, trade and vehicle repair sectors reported higher levels of discontent. Three-quarters of businesses do not expect an improvement in the economic situation within the next three months; only 13% anticipate better conditions, while 20% foresee deterioration.

Bureaucratic hurdles emerged as the biggest concern, cited by over 80% of businesses, with nearly 90% of industry and construction firms impacted. Other top challenges include uncertainty regarding policy direction, high labor costs, and a skilled labor shortage. Dulger remains cautiously optimistic about the potential for social state reforms focusing on limiting social contributions, which have surged above 42% of gross wages.

The BDA plans to formally present these findings at the upcoming German Employers' Day in Berlin, where Chancellor Friedrich Merz and cabinet members are expected to respond. This survey underlines the pressing economic challenges faced by German businesses and the urgent demand for government action to strengthen economic dynamism and reform the social system.