Germany must place economic growth back at the center of its economic policies. Before discussing the future of the country's economy, it is essential to pay attention to the current conditions of companies.
Economic Situation and Pressure on Businesses
According to the DATEV median index, over the past two years, economic developments do not indicate a sudden decline, but rather resemble a gradual fatigue. Revenues have not sustainably increased, while costs, including wages, have continuously risen. Employment, which was once a stabilizing factor for small and medium-sized enterprises, has gradually come under pressure. Although these businesses continue to survive, they are not in a growth state.
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Need for Investment and Innovation
The decrease in revenue alongside rising costs reduces the necessary space for investment and innovation that the country needs. Many companies, under the current tough conditions, are spending their resources on maintaining the status quo. Meanwhile, investing in new technologies or expanding capacities has become more difficult. To achieve digitalization goals, sustainable production, and innovative business models, companies need more economic space.
Germany must move towards a more efficient government. Administrative processes and taxes waste time and resources, especially for small and medium-sized enterprises that cannot allocate resources across different sectors. At the same time, the government itself has grown increasingly larger.
Germany needs to focus on a more efficient government with fewer resources. This should not be seen as an independent goal but as a tool to free up resources and labor from the public sector to the private sector. An appropriate strategy for economic growth should provide businesses with the necessary space for independent decision-making rather than putting more pressure on them.
Germany can only maintain its economic power within a strong economic Europe. The European internal market is one of our greatest advantages, but companies still face challenges in dealing with various regulations. If Europe does not become a common market with better conditions, ideas may be generated, but added value will be created elsewhere.
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