Mid-term review of the actions of the federal government and coalition groups

Dome of the Reichstag Building © BDI

The 18th legislative term started on 22 October 2013 – around two years ago. Time for the BDI to look back at the work performed by the federal government and the coalition groups and to present policy recommendations for the second half of the 18th electoral term.

Companies recorded strong economic figures during the first two years of the current legislative term, leading to high tax revenues. However, the federal government did not take full advantage of this temporary strength to condition Germany in the long term by investing intelligently in education, digital networks and infrastructure. On the contrary, German business has been weakened by the lowering of the retirement age to 63, pay equity, the estate tax reform and other federal government projects. The renewable energy levy, in particular, remains a severe competitive disadvantage that is set to become even more dramatic in the future. While the Federal Ministry of Economy promised to cut the costs of the energy transition, this has proved to be wishful thinking. The EEG apportionment and grid costs are rising – and they will continue to do so unless policymakers take encouraged countermeasures. So far the discussion surrounding nuclear power has not helped to build confidence either. It is clear that German policy and companies need to work out a sensible roadmap for Germany’s nuclear phase-out. This process must leave reasonable future prospects open to the companies and their employees.

With its implementation of a large number of individual measures, the Federal Government complicates it for companies to make a positive contribution to our country’s prosperity. German policy does not seem to be mindful of the fact that our industry in particular, with its unique degree of openness, is dependent on the situation in Europe and across the globe – in both a positive and a negative sense. Germany’s strong global market position in exports and foreign direct investment always carries the risk that global downturns will have a disproportionate impact on the German economy. We can see this in particular in the current weakness of the major emerging economies, particularly China.

At the present time in particular, TTIP therefore presents a good opportunity to improve transatlantic trade and introduce high common standards. The federal government – and Chancellor Merkel and Minister for Economic Affairs Gabriel in person – has made a positive contribution. Unfortunately, limited progress has been made in the negotiations. Particularly in the key areas of regulatory cooperation, investment protection and access to US procurement markets, the negotiating partners remain far from reaching an agreement. The German government and the other EU member states must therefore exert greater political pressure on the negotiating parties – the US government and the European Commission – and push for progress.

On top of all this, in recent weeks the refugee issue has come to the fore with unexpected speed and force. The German people have shown that they can act collectively, efficiently, quickly and courageously in the face of a continuously high influx of refugees and the challenges this creates. However, now it is up to the government to rapidly develop a coherent strategy for dealing with the issue in the long term, in partnership with our European neighbours and without overburdening local authorities and communities.

These and other topics are addressed in the current publication. Over the course of 20 concise chapters, the BDI evaluates the work by the federal government and the coalition parliamentary groups, and delivers concrete recommendations for action in the second half of the 18th electoral term. With this publication, the BDI, as the umbrella organisation of German industry, wants to make a constructive contribution to political debate in our country. We are available for consultation with all policymakers at any time.