CFS survey on ‘Economic policy challenges of the new federal government’

An overwhelming majority of respondents consider tax relief for companies to be important (51.3%) or even very important (40.7%) in order to overcome the current weakness of the German economy. At the same time, the panellists consider high investment in digital and logistics infrastructure to be very important (59.5%) or important (39.2%). Despite this high level of agreement, only around 53% believe that high public investment in infrastructure justifies non-compliance with the debt brake. 44% do not share this view. ‘The survey results make it clear that the affordability of tax relief and simultaneously increasing investment is a sticking point. Without a reform of the debt brake, it is likely to be difficult,’ explains Professor Volker Brühl, Managing Director of the Centre for Financial Studies at Goethe University.

There is a broad cross-party consensus that bureaucracy should be reduced. It is interesting to note that around 65% of respondents nevertheless do not expect substantial progress to be made in this area.

‘‘I hear the message, but I don’t believe it’ summarises the mood. The majority seem to feel like Faust at Easter. The call for a noticeable improvement in competitiveness is audible. And it wouldn’t be rocket science to reduce reporting obligations to a sensible level and practise regulation in a risk-appropriate manner,’ says Hubertus Väth, Managing Director of Frankfurt Main Finance.

Another obstacle to growth is the long-lamented shortage of skilled labour, e.g. in the skilled trades, for engineers and IT specialists. At the same time, the number of graduates in commercial professions and degree programmes (business administration) is constantly increasing. Around 88% of those surveyed consider this to be an undesirable development.

‘A change in education and science policy is needed to remedy the structural shortage in the STEM subjects and the shortage of young talent in the skilled trades. If necessary, the number of study places in economics must be limited and a hard NC introduced,’ adds Brühl.