The German government faced criticism at Employers’ Day for insufficient progress in addressing economic challenges. President Dulger acknowledged some advancements in skilled worker immigration and bureaucracy reduction but emphasized the need for competitiveness. Chancellor Scholz promised relief through the Supply Chain Act, though skepticism remained. The new EU supply chain law aims to enhance human rights accountability but is seen as overly bureaucratic by businesses. Dulger also called for reforms in citizen’s income and pension policies to stimulate the economy.
The German government faced criticism during the Employers’ Day event, with President Dulger highlighting that while some progress had been made, it fell short of expectations. Chancellor Scholz responded by promising relief, particularly regarding the Supply Chain Law.
Dulger noted that there is a growing recognition of the issues at hand within the federal government. He acknowledged improvements in skilled worker immigration and bureaucratic reductions, but emphasized that these measures were insufficient. “Competitiveness requires effort; it cannot simply be subsidized,” he stated.
The ongoing crisis is reminiscent of challenges faced in the early 2000s.
Scholz: ‘Delivering on Promises’
Chancellor Olaf Scholz reiterated his commitment to easing bureaucratic burdens on businesses. Referring to the Supply Chain Act, he insisted, “We are taking steps to simplify this,” promising implementation within the year.
However, Dulger remained skeptical. “I’ll believe it when I see it on my delivery bill,” he remarked. He called for further action, highlighting previous requests to either simplify or abolish the Supply Chain Law. Dulger criticized Economic Affairs Minister Robert Habeck, who had previously acknowledged shortcomings in addressing these concerns but had yet to deliver tangible results.
The FDP party opposes the EU Supply Chain Law and advocates for the interests of the German economy.
Businesses Speak Out Against Bureaucratic Challenges
The European Supply Chain Act was enacted earlier this year, giving EU member states two years to integrate the new regulations into their national laws. Designed to promote human rights globally, it holds large corporations accountable for benefiting from human rights abuses, such as child labor or forced labor. Nonetheless, businesses argue that the law introduces considerable bureaucracy and undermines their competitive edge against foreign entities.
In July, under pressure from the FDP, coalition leaders agreed to amend the Supply Chain Act as part of a growth initiative aimed at revitalizing the economy. The revisions would significantly reduce the number of companies subject to the German regulations regarding human rights and environmental monitoring across their supply chains.
The German economy is facing challenges, prompting the government to introduce a growth initiative to enhance economic performance.
Dulger Critiques Citizen’s Income and Pension Package II
Dulger also raised concerns regarding the citizen’s income reform, describing it as a “failed initiative” that hampers progress. He called for adjustments, asserting that it should promote rather than obstruct economic activity.
He labeled the Pension Package II as a relic of past reform failures, urging a reduction in incentives for early retirement and advocating that work remain attractive even beyond retirement age. Dulger expressed support for regulated migration to bolster the labor market.
Chancellor Scholz Commits to Bureaucratic Reforms
‘Moving Forward Together’
In his address, Scholz defended his administration’s economic strategy, asserting that the growth initiative targets crucial areas for expansion and that the new Skilled Immigration Act is effectively addressing the skilled labor shortage. He mentioned that thoughtful modifications to the Citizen’s Income are underway.
Scholz emphasized unity in overcoming economic difficulties, stating, “We must navigate out of this unfavorable situation together, where poor statistics contribute to negative sentiment, which in turn exacerbates economic challenges.”
He provided an overview of the main elements of the growth package being implemented by the coalition government.
Habeck’s Defense
Economics Minister Habeck also defended the government’s subsidy policies during the event, stating that the goal is to support Germany’s energy-intensive industries in achieving climate-neutral production. “I am committed to retaining energy-intensive SMEs in Germany,” he asserted.
However, he acknowledged that current economic predictions are less than rosy. The country faces significant challenges, particularly regarding medium-term growth potential, which he estimated would be limited to just half a percent under optimal conditions. “The challenges we face are more profound than we have previously recognized,” he concluded.
The topic was discussed in detail on October 22, 2024, at noon.