German Leadership Faces Economic Criticism

Chancellor Olaf Scholz and Employers' President Rainer Dulger clashed at the German Employers' Day, highlighting tensions within Germany's economic policy. Scholz criticized EU overregulation and voiced plans to scrap the contentious Supply Chain Due Diligence Act, a move intended to reduce bureaucratic burdens on businesses. He also announced a pact for industrial jobs, aiming to tackle rising non-wage labor costs through more efficient social security systems.

Dulger, however, expressed dissatisfaction with the current government's performance. He criticized the traffic light coalition's policies, particularly the citizen's income reform and Pension Package II. He stressed the need for improving skilled worker immigration, deregulation, digitalization, and limiting social security contributions. Dulger emphasized that competitiveness must be earned, not created through subsidies, urging the government to foster conditions favorable to investment and growth.

The Supply Chain Due Diligence Act, implemented to hold companies accountable for human rights violations, has been a point of contention. Businesses argue it imposes heavy bureaucratic demands and disadvantages them against international competitors. Scholz promised to ease these burdens by the end of the year, though Dulger remains skeptical until tangible changes are made.

Both Scholz and Economy Minister Robert Habeck defended their policies, emphasizing support for energy-intensive industries and the importance of climate-neutral production. Despite this, Dulger warned of a potential "downward spiral" if economic concerns aren't adequately addressed. Scholz called for collective efforts to overcome economic challenges, urging positive sentiment to drive better outcomes. The debate underscores the ongoing struggle to balance regulatory measures with economic vitality in Germany.