The Federal Association of Small and Medium-Sized Businesses has asked the traffic light coalition to take noticeable relief measures for companies. Managing Director Markus Jerger explained that without an effective net reduction in taxes, energy prices and social security contributions and a radical reduction in bureaucracy, Germany would lose its future viability. “There is a risk of loss of growth and prosperity and a descent into second-class economic status.”
According to Jerger, medium-sized companies need a comprehensive reform agenda with relief. Specifically, he called for the temporary suspension of advance tax payments, the introduction of a subsidized industrial electricity price and the abolition of the solidarity surcharge. “It’s enough – enough with the highest minimum wages, enough with the highest tax burdens in Europe.” Finance Minister Christian Lindner (FDP) must assert himself against the coalition partners.
In the course of preparing the 2024 federal budget, Economics Minister Robert Habeck (Greens) and Lindner clashed violently. The core question is whether and how more income can be generated and which projects should have priority. The departments have additional requests worth billions. Lindner himself has spoken out in favor of reducing the burden on the economy and has announced a “tax growth package”.
Meanwhile, according to the Kiel Institute for the World Economy (IfW), German companies have not significantly reduced their dependencies on individual markets, even a year after the Russian invasion of Ukraine. “There is a discrepancy between what you hear and what is said and what companies are already doing,” said IfW President Holger Görg, the German Press Agency (dpa). The data does not yet show much of a diversification.
The recently announced billions in investments by large companies such as BASF and Bosch in China, for example, do not indicate a withdrawal from the People’s Republic, he said. This could be due to the fact that strategic decisions are being postponed in view of the current crises. “But of course it can also be because the problems for the individual companies are not as big as you think.”
However, with the Russian invasion, many companies realized that they had to rethink their dependencies and supply chains. Spreading risks, bringing production back to Europe a bit, producing more yourself – that’s what everyone is talking about now. “Three years ago this awareness was not as pronounced as it is now.”
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.