Germany has become a symbol of chronically weak growth. Federal Finance Minister Christian Lindner recently reported on Family Business Day that symbolic photos of German shopping streets are displayed at international conferences as a sign of economic weakness.
Germany used to be Europe's growth engine, but now we are losing speed. We cannot accept this! Many employees also now feel that the economy is not doing well. Short-time work is not a mass phenomenon, but according to the Ifo Institute, almost a fifth of industrial companies say they plan to work short-time in the near future. It is five minutes past twelve. The traffic light must finally deliver and present its announced revitalization package.
From the perspective of family businesses, there is no need for new debt-financed financial funds, as large corporations demand. Subsidies are not a solution either. It is possible to comply with the debt brake and still improve the framework conditions. Five concrete examples of how our country is moving forward.
1. Incentives for more work
Fortunately, there are still companies that have full order books. When they ask their employees if they work overtime, they often get the same answer: “Boss, it's not worth it to me.” their salaries Pay income tax.
High taxes and social security contributions hinder performance. We need tax reform that will ease the burden on middle-income earners. This could be implemented step by step. In the short term, politicians should ensure that social security contributions do not continue to skyrocket. Because higher social security contributions also make work less attractive.
2. Abolish telephone sick leave
Whether DAX companies with free float or family-owned companies: they all consider that illness rates are at a very high level. During the pandemic, telephone sick leave was justified. It was discontinued after the pandemic and then reintroduced in 2023. The first day after the reintroduction, illness reports spiked. Germany cannot afford to have the longest vacations, the most holidays and the highest sick leave. The doctor must rewrite the discharge.
3. Germany is the country with the highest taxes for family businesses
Germany has the highest tax burden for family businesses. For example, while the United States and France reduced tax rates, Germany remained inactive. We should reduce the corporate tax burden from the current 30 percent to a competitive level of 25 percent. Taking into account the debt brake, corporate tax could be reduced in several stages.
Tax losses would be limited and private investment would be boosted in the medium term. If the cuts were reduced in two stages, private investment would increase by more than 70 billion euros after ten years. Politicians would do well to put an end to the constant debates about tax increases. They are a concern for companies that make their investment decisions in the long term.
4. Suspend regulations
A young entrepreneur recently told me that he had to appoint three fire safety officers. And that's in a start-up company! A fire safety officer would do the same. From management representatives to human rights officers: the law requires companies to appoint representatives for many areas and train them. Restriction to the essentials is indicated. Many representatives can be removed without replacement.
Equally important: Federal Economics Minister Robert Habeck has announced that he will suspend the German supply chain law until the EU regulation comes into force in a few years. This has to come now. Many large family businesses have long been testing their suppliers against UN standards and had to create a new testing process in accordance with the German supply chain due diligence law.
A large family business estimates that the German Supply Chain Act alone will cost two million euros. Companies should not waste their scarce resources on bureaucracy, but rather use them for innovation and research.
5. Limit grid tariffs for electricity
Network rates, which are part of the electricity bill, become a risk cost for companies. At the beginning of the year, network costs for businesses and individuals doubled. In Germany, companies pay as much for network tariffs as in other countries for the total price of electricity. Politicians should limit expensive underground wiring of power lines to what is absolutely necessary, because overhead lines are much cheaper.
Last but not least: we need an EU policy that focuses on generating growth and innovation. In the last five years, the EU has unleashed a tsunami of bureaucracy in companies. Green Deal, pay transparency directive, taxonomy: it is difficult to keep track of the flood.
In these weeks the EU Sustainability Directive will be incorporated into German legislation. It contains over 1000 reporting points that businesses should pay attention to. Only for large family businesses, this directive entails additional costs of between 400,000 and 500,000 euros per year. This can not go on like this.
Former EU Commissioner Günther Oettinger is right when he says: Europe has to catch up economically. “Europe should tackle the big problems and leave people alone when it comes to the small ones, without bureaucracy.”