Germany's business climate hits decades-low as DIHK CEO demands urgent reforms
Helena Melnikov, CEO of the German Chambers of Industry and Commerce (DIHK), has warned that Germany's business climate is at its worst in decades. She urged the federal government to push through major reforms before summer to prevent further economic decline. According to her, without immediate action, the country's future as a competitive business location looks bleak.
Melnikov highlighted three key problems: high costs, excessive bureaucracy, and slow decision-making. She described Germany as having become too expensive, too slow, and too complicated for companies to thrive. Current data supports her concerns. The latest DIHK business cycle survey found that over 25% of German firms now rank bureaucracy as one of their biggest risks. Meanwhile, the Ifo Institute reported that 36.6% of companies feel they are losing competitiveness against non-EU rivalsâa record high driven by energy prices and labour shortages.
To ease the burden, Melnikov demanded a permanent cut to the electricity tax, reducing it to the EU minimum for all consumers. She also proposed a temporary reduction in energy taxes on petrol, diesel, natural gas, and heating oil before Easter. If implemented, petrol prices would drop by roughly 35 cents per litre, while diesel would fall by nearly 17 cents. Beyond taxes, she called for sweeping changes to slash labour costs and remove bureaucratic hurdles. Melnikov argued that scrapping these obstacles would save businessesâand the stateâsignificant sums. She stressed that Germany could still reclaim its economic strength, but only if politicians act decisively now.
The DIHK chief's warnings come as company morale hits historic lows. Her proposed reforms target energy costs, red tape, and labour expensesâareas where firms report the most pressure. Whether the government will adopt these measures before summer remains to be seen.
