“The Germany as a business location is under pressure like rarely before in post-war history,” says a joint statement from the associations, which is available to the German Press Agency. With a view to years of stagnation in the economy, a “tipping point” is warned. “The German economy expects politicians to have significantly more courage to change,” it says. “2026 must be the year of reforms.”

Merz will meet on Friday in Munich at the International Crafts Fair with representatives of the leading associations – the Federal Association of German Employers’ Associations, the Federal Association of German Industry, the German Chamber of Commerce and Industry and the Central Association of German Crafts.

After three years of economic stagnation, no broad upswing is expected in Germany this year either. With the Chancellorship of Merz There were high expectations from business associations. But there are increasing voices saying that Merz must now deliver.

“Taxes approaching tipping point”

The statement states that the conditions in Germany have deteriorated significantly in recent years. The burden on companies and employees has increased “dramatically”. “The German economy was able to defy these adversities for a long time. However, after three years without growth, many indicators suggest that the resistance forces are eroding and are heading towards a tipping point.”

Government should deliver

The federal government launched important initiatives in its first year in power to stop the trend, according to the associations. “However, the measures are far from sufficient and many projects have so far only been announced on paper.” The longer the process of change is postponed, the more painful the measures will be later. “The economic mood in Germany will only change when there are noticeable changes that reach companies and businesses.”

Merz said in January that 2026 should be a “year of upswing and growth”. The black-red coalition has set up commissions for reforms in health and pension policy, for example. However, there is a risk of conflict in the black-red coalition over the specific form of reforms.

What the economy demands

The leading associations reiterated calls for structural reforms in the social systems. Non-insurance benefits should be financed entirely from tax revenue. Pension reform is needed this year to slow the increase in spending. The associations are in favor of increasing the retirement age and abolishing incentives for early retirement. Both are controversial in the political debate. The associations also want quick tax relief, less bureaucracy and lower energy costs – specifically, a reduction in electricity taxes for all companies.