Lower energy costs, lower taxes, more financial incentives for investment, more flexible labor laws, an end to social security payments and above all, less bureaucracy — that is what German businesses are demanding from the country's next government.

"The economy is shrinking. Unemployment is growing. Germany has become unattractive for investors," that is how Rainer Dulger, president of the Confederation of German Employers' Associations (BDA), summed up the situation at the last employers' conference in late October 2024.

Well-trained and specialized employees have become rare. Regulations and bureaucracy, said Dulger, have grown at a rate proportional to the growth of other burdens heaped on companies — such as rising employment and production costs. Germany, he said, is no longer competitive globally.

Germany's economic strength depends heavily on industry, which is responsible for roughly a quarter of GDP. After two years of recession, the Federation of German Industry (BDI) calculated that production output is now far lower than it was five years ago. The result: Less is produced and built in Germany, and less is bought and consumed.

In their latest annual advisory report to the German federal government's Council of Experts, economists documented a continuing downturn across all sectors of the economy. Especially disconcerting are indications that fewer German products now find their way abroad.

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For decades, German's successful business model was based on a simple formula: purchase raw materials and parts abroad at a good price, then use German engineering prowess and cheap energy to transform them into valuable products "made in Germany."

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