“We urgently need a new government”

The BDI expects a GDP increase of 2.25 percent in 2018. 2018 must be a year of action, BDI President Dieter Kempf said. A future federal government will have to spend money in areas where there are increasing opportunities for growth, where jobs can be secured and new ones created.

The Federation of German Industries (BDI) has called on the CDU/CSU and SPD parties to start coalition negotiations without delay. “We urgently need a new government. It is therefore to be welcomed that serious exploratory talks are currently going on and that they are following a strict timetable”, said BDI President Dieter Kempf in Berlin. Whoever forms the government in the near future needs to be more proactive with the economy. “Our companies want planning certainty and our global partners expect us to have the ability to act”, emphasised Kempf. “2018 must be a year of action. The starting position for a new government could hardly be better.”

According to the BDI's assessment, the German economy will grow by 2.25 percent in 2018, which would mean an increase in economic output for the ninth year in a row. It considers the upturn to be robust and sustainable. “We do not see any real risk that the economy will overheat”, said the BDI President. He expects the level of employment to continue to increase this year, with as many as 100,000 new jobs being created.

“Foreign trade will primarily be the engine that drives the economy”, said Kempf. According to the BDI, exports will increase by 5 percent this year. “Approximately every fourth job in Germany depends on exports. But looking at the global markets makes us feel rather uncomfortable. The biggest threat to our recovery is the high degree of international uncertainty”, warned Kempf.

He considers Britain's exit from the EU to be the greatest risk for the economy. Even the absolutely essential transitional arrangements will give companies no more than a pause for breath. Kempf: “Not only does the sword of Damocles hang over many of the United Kingdom's activities, due to the level of uncertainty, but the country is also exposed to the risk of massive devaluation. Our companies must prepare for all eventualities - including, in particular, for a hard Brexit.”

A future federal government will have to spend money in areas where there are increasing opportunities for growth, where jobs can be secured and new ones created. "We must finally move forward with an expansion of our digital infrastructure”, said Kempf. A quarter of all companies still have no access to a fast internet connection. “This situation is completely unacceptable. We expect the future federal government to intensify its dialogue with the network providers and provide investment incentives for accelerated expansion.”

Also with regard to tax policy, Kempf believes the future government should act boldly, in particular given the increased tax competition rekindled by the USA and China. Kempf called for an end to the solidarity surcharge. In addition, he recommended an overdue correction to the capital-based taxation elements of business tax and the introduction of tax incentives for research. These are now a given in almost every industrialised country. Along with tax policy, energy and climate policy should also be subjected to scrutiny. “We need a more realistic approach in our energy and climate policy”, emphasised Kempf. The same applies to the national climate target of a 40 percent reduction in greenhouse gases by 2020. “Apparently, exploration companies are willing to accept the reality in this respect. The policy must turn the energy revolution into a success story that is pragmatic and oriented towards economic efficiency.” The BDI President explained that climate protection presents industry with challenges, risks and opportunities.

“Germany must make far greater use of the opportunities presented by digitalisation”, insisted Kempf. The BDI has therefore launched a new initiative called “Gesundheit digital” (The digitalisation of health). It aims not to debate distribution measures - such as  citizens' insurance - but instead to discuss innovations and investments, and implement them. The key to success is the ability to gather, transfer and process large amounts of data.  “The future federal government needs to create the legal basis for the use of health data without delay”, insisted Kempf.