Germany’s business community, initially buoyed by the arrival of Chancellor Friedrich Merz’s coalition government, is now signaling a critical shift from optimism to a demand for tangible policy implementation. After over 100 days in power, the pro-business and pro-growth platform that fueled early confidence is facing scrutiny, as industry leaders and economists alike press for the government to translate its ambitious promises into concrete economic reforms and investments.
- German business leaders, initially optimistic about Chancellor Merz’s new government, are now pressing for concrete policy implementation.
- After over 100 days, the coalition’s pro-business and pro-growth platform faces scrutiny as industry leaders demand action.
- Early confidence was fueled by promises of economic reforms and significant investment in areas like infrastructure and defense.
- Sentiment is rapidly evolving from initial praise to a clear call for decisive execution of pledged initiatives.
- Concerns are mounting regarding the pace of reform in social security, bureaucracy, and broader structural changes.
Initial Hopes and Early Praise
A New Economic Direction
The new coalition, comprising Merz’s Christian Democratic Union (CDU), its Bavarian sister party the Christian Social Union (CSU), and the Social Democratic Party (SPD), took office amid high hopes for a renewed economic direction. Chancellor Merz’s emphasis on reforms and investment, coupled with a significant fiscal shift enabling increased spending on defense and infrastructure, initially resonated strongly with the private sector. Thomas Schulz, CEO of construction firm Bilfinger, reflected this sentiment, noting a departure from what he described as years of ideologically driven, rather than business- or society-driven, political decisions.
Broad Sectoral Enthusiasm and Investment Pledges
This initial enthusiasm was echoed across diverse sectors. Oliver Bäte, CEO of financial services giant Allianz, commended the government’s renewed commitment to national competitiveness. He specifically lauded the mobilization of financial reserves for an “unheard of investment program,” aiming to reverse nearly two decades of underinvestment in vital areas such as infrastructure, defense, and education. Further solidifying this collaborative spirit, a consortium of 61 leading German companies collectively announced plans to invest 631 billion euros by 2028, a move Timotheus Höttges, CEO of Deutsche Telekom, described as a crucial “alliance between the corporate world and politics.” Data from the Ifo institute supports this positive trend, reporting five consecutive months of improved company sentiment.
The Call for Concrete Implementation
Shifting Sentiment: From Applause to Demand
However, the tenor from boardrooms is rapidly evolving from applause to a call for decisive action. While recognizing the government’s positive attitude, Allianz’s Bäte underscored that “now comes the delivery.” Bilfinger’s Schulz cautioned that much remained “lip service,” despite “very good ideas,” emphasizing the urgent need for execution. This sentiment is reinforced by a survey conducted by Ifo and Frankfurter Allgemeine Zeitung among economists. A significant portion of respondents—30% rating economic policy measures as ‘rather negative’ and an additional 12% as ‘very negative’—highlighted a perceived lack of substantive reforms during the first 100 days.
Key Concerns and Industry Proposals
Specific concerns raised by economists and business leaders include the slow pace of reform in social security systems, insufficient impetus for broader structural changes, and persistent issues with bureaucracy. Progress on climate protection initiatives also appears to be falling short of expectations. Executives like Roland Busch, CEO of tech conglomerate Siemens, have outlined a clear agenda for the government, advocating for critical reforms encompassing accelerated digitalization, streamlined decision-making processes, reduced bureaucratic hurdles, effective energy transformation strategies, and necessary adjustments to the labor market.
Crucial Test for the Merz Administration
The current juncture presents a critical test for Chancellor Merz’s administration. While initial pledges ignited considerable optimism, the sustained confidence of Germany’s influential business sector now hinges on the government’s capacity to translate its strategic vision into measurable policy outcomes, thereby underpinning future economic growth and competitiveness on the global stage.
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.