Germany’s CDU wants to call the shots on the economy early

The German conservatives have urged Chancellor Olaf Scholz to adopt measures they hope will address the country’s economic problems, including getting rid of the EU supply chain law known as the corporate sustainability due diligence directive.

Germans will elect a new government in late 2025 – with polls as they stand, the centre-right CDU/CSU is comfortably first and expected to lead the next government.

“The economic outlook for our country continues to deteriorate significantly in 2024,” CDU leader Friedrich Merz said. Many companies are “relocating parts or even all of their production” into other countries, he added in a letter sent to Chancellor Olaf Scholz late last week.

A total of 12 measures were presented to Scholz – as well as to future coalition partners. Merz has already urged Scholz to abandon his current government partners and rebuild the country’s famous “grand coalition” – on the issue of migration.

His ideas range from cutting the corporate tax burden by a sixth and capping social security contributions at 40% of gross wages to vetoing the EU’s Corporate Sustainability Due Diligence Directive (CSDDD).

As for the letter, the liberal FDP welcomed the conservatives’ support, while the Greens and SPD were more cautious.

Merz’s letter is the latest in a long line of ideas on how to fix Germany’s economy. Vice-Chancellor Robert Habeck’s idea is a special shadow budget of €1.6 trillion for industry, disbursed through unbureaucratic tax credits.

Finance Minister Lindner’s idea is a “dynamising programme”, which amounts to slashed corporate taxes, a reversal of Germany’s ambitious renewable energy plans and focusing on CO2 pricing rather than “banning” technologies.

The SPD has not yet presented its suggestions.

(Nikolaus J. Kurmayer | Euractiv.de)