Fearing uncertainty, German industry calls for fast snap election
07/11/2024 09:52
By Christoph Steitz
FRANKFURT, Nov 7 (Reuters) - German industry, reeling
from high costs and fierce Asian competition, urged Berlin on
Thursday to hold snap elections as soon as possible after the
ruling coalition broke up, warning Europe's top economy had no
time to waste to get back on track.
The comments from the automotive, chemicals and energy
sectors, which together form Germany's industrial backbone,
highlight the need for fast reform as German companies are
increasingly falling behind international competitors.
On Wednesday evening, German Chancellor Olaf Scholz fired
Finance Minister Christian Lindner after weeks of deadlock over
budgets and other policy, dissolving the three-way "traffic
light" coalition consisting of the Social Democrats (SPD),
environmentalist Greens and neo-liberal Free Democrats (FDP).
The move has thrown Europe's economic powerhouse into a
leadership vacuum at a time of industrial weakness.
Scholz said he was planning to hold a vote of confidence in
January, paving the way for elections in March, a timeline key
industry representatives said raised the risk of prolonged
uncertainty when the sector needs regulatory support.
"The end of the traffic light coalition comes at a bad
time," said Wolfgang Grosse Entrup, who heads Germany's pharma
and chemicals lobby group VCI, representing companies such as
BASF BASFn.DE , Covestro 1COV.DE and Evonik EVKn.DE .
"Especially in these challenging times, we need a
solution-oriented federal government capable of taking action
... We cannot afford a months-long standstill and political
deadlock."
The comments chimed with those of Hildegard Mueller,
president of the powerful car lobby group VDA, which speaks on
behalf of Germany's major automakers Volkswagen VOWG_p.DE ,
Porsche P911_p.DE , Mercedes-Benz MBGn.DE and BMW BMWG.DE .
Mueller, a former energy executive, said "new elections must
be held as soon as possible. Germany cannot afford any further
standstill in this situation".
The situation in the car industry is particularly dire, with
all automakers suffering under growing global trade tensions,
particularly between top markets U.S. and China, while Asian
rivals are entering the European market with cheaper products.
German exports and industrial output
fell more than expected
in September, underlining the weakness of two of the
pillars of Germany's economic model at the start of the fourth
quarter.
Volkswagen CEO Oliver Blume, currently locked in a major
dispute with unions over potential pay cuts and plant closures,
met with Scholz last week as part of an exchange with industry
over how to support the troubled sector.
Scholz said on Wednesday he was planning a draft law on
immediate support measures for the industrial sector before
Christmas, raising the question how he intends to do that
without a majority in parliament.
(Reporting by Christoph Steitz; editing by Matthias Williams
and Mark Heinrich)
((christoph.steitz@thomsonreuters.com; +49 30 220 133 647;))