Urgent Political Reforms Needed to Support Germany's Craft and SME Sectors

Christian Schwannecke, representing the German Confederation of Skilled Crafts (ZDH), has called for significant political reforms to enhance the competitiveness and sustainability of Germany’s craft and small to medium-sized enterprise (SME) sectors. He highlights that although many politicians understand the needs of these sectors, the complex legislative process often dilutes practical insights needed for effective policy.

A key concern is the burdensome bureaucracy faced by the craft sector, which deters young professionals from entrepreneurship. According to a 2023 University of Cologne survey cited by Schwannecke, over 35% of young graduates avoid self-employment due to excessive bureaucratic requirements. To combat this, the ZDH advocates for the immediate removal of onerous documentation obligations, including the swift abolition of the receipt obligation, which currently generates excessive administrative strain and waste.

Furthermore, Schwannecke stresses the urgent need to reform vocational education systems to place vocational paths on equal footing with academic qualifications, thereby enhancing opportunities within the craft sector. Another critical issue is the disproportionate rise in social security contributions impacting labor-intensive sectors; if unaddressed, these contributions could reach 50%, endangering the viability of many craft businesses.

Additional proposals include expanding electricity tax relief to benefit all craft enterprises and introducing more flexible working hours to better align with business needs and employee wellbeing. Schwannecke warns that without these reforms, the economic stability and social welfare contribution of the craft and SME sectors will be severely compromised.

These calls come amid broader concerns about political fatigue and the increasing pressures faced by politicians, which may hinder timely reforms. Nonetheless, Schwannecke and ZDH emphasize that addressing these challenges is crucial for restoring trust in politics and ensuring Germany’s economic future.

In summary, the ZDH urges lawmakers to muster the courage and strength to undertake these sweeping reforms, crucial for maintaining the competitiveness of the craft and SME sectors, safeguarding jobs, and stabilizing the economy in challenging times.