Scholz holds out prospect of “pact for industry” after summit
Published: Tuesday, Oct 29th 2024, 21:40
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Following his meeting with business representatives and trade unions, Federal Chancellor Olaf Scholz (SPD) has called for a "pact for industry" to be forged together. "Germany is a strong country that is currently facing major challenges," he said after the discussions in the Berlin Chancellery. "Now is the time to tackle them together and strengthen the location with a pact for industry that includes very specific measures."
Scholz had previously discussed ways out of the economic crisis with 13 representatives of industry associations, trade unions and selected companies. Government spokesman Steffen Hebestreit announced that a further meeting in this circle is to take place on November 15.
Lindner calls for joint decisions on direction
Prior to this, Finance Minister Christian Lindner's FDP had organized its own summit to which SMEs and the skilled trades had also been invited. Lindner then called for joint decisions on the direction of the coalition government in the coming weeks. He rejected speculation that the coalition with the SPD and the Greens was coming to an end. "There is also such a thing as a government commitment, and it is always better for Germany if a government finds a common direction, describes it and implements it," he said.
Concrete results were not planned for either meeting from the outset. Following the FDP summit, employer president Rainer Dulger urged the government to overcome its differences and develop a joint strategy for all economic sectors. "Together - and I emphasize together - they must pursue the right economic policy to make this location competitive again."
Scholz, Habeck, Lindner: everyone does their own thing
The industry summit, which Scholz initiated two weeks ago single-handedly without his coalition partners, caused quite a stir. The reactions of Lindner and Economics Minister Robert Habeck (Greens) revealed just how deep the rifts in the coalition have become.
Habeck presented an impulse paper in which he called for a fund worth billions for more investment, which is hardly feasible with Lindner and Scholz. Lindner's FDP parliamentary group quickly organized a counter-summit.
Dürr: Germany should return to the Champions League
FDP parliamentary group leader Christian Dürr then said: "I believe Germany should play in the Champions League again. That should be our aspiration." Dulger emphasized that the competitiveness of Germany as a business location must once again become the focus of the coalition's political action. "We must now get down to business after the political exhibition run and we must deliver."
The German economy is in crisis; according to forecasts, 2024 will be the second year of recession in a row. Business associations have long been calling for comprehensive structural reforms: lower energy prices, less bureaucracy, measures to combat the shortage of skilled workers, lower social security contributions, more money for the sometimes dilapidated infrastructure. The traffic light coalition has announced a "growth initiative" with many measures. However, none of these have yet been implemented and some of them are controversial. Business associations consider the plans to be insufficient.
Next summit right after the budget showdown
Six representatives of large companies took part in the summit at Scholz, including VW boss Oliver Blume, whose crisis-ridden company is currently facing plant closures and massive job cuts. Afterwards, government spokesperson Hebestreit made it clear that a continuation has been firmly agreed: "This discussion is the start of a process in which the federal government will discuss with the participants in the coming weeks ways in which it can provide further impetus for growth, secure industrial jobs in Germany and strengthen Germany as an industrial location."
It remains unclear whether Linder and Habeck will take part in the next round. However, Scholz needs both coalition partners in order to implement measures. "It is clear that we will have to find a common position in the coming weeks, if only because of the timetable for the 2025 federal budget," said Lindner.
On November 14, the budget committee will meet to finalize the budget for the coming year. If the coalition does not then agree on how to plug the billions of euros in unresolved gaps, it will be on the brink anyway. The next summit is due to take place the day after this date.
Will the traffic lights still be on at Christmas?
At an event in Cologne, Lindner evaded a journalist's question as to whether the coalition would still be in place at Christmas. "I think the times are too serious for us to push ahead with coalition speculation," he said. "It's about solutions on the merits. Citizens expect governments to deliver solutions."
Scholz did not commit to a similar question during his trip to India at the weekend. A journalist wanted to know whether the coalition celebrates Christmas together. "Christmas is always celebrated," he said.
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