Politics German Chancellor Scholz promises "Pact for Industry" after summit

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After his meeting with business representatives and trade unions, German Chancellor Olaf Scholz (SPD) called for a joint effort to forge a "Pact for Industry."

"Germany is a strong country that is currently facing major challenges," he said after the consultations at the Berlin Chancellery. "Now it's about working together and strengthening the location with a Pact for Industry that includes very concrete measures."

Scholz had previously consulted with 13 representatives from industry associations, trade unions, and selected companies on ways out of the economic crisis. Government spokesman Steffen Hebestreit announced that another meeting in this group is scheduled for November 15.

Lindner urges joint directional decisions

Previously, the FDP of Finance Minister Christian Lindner held its own summit, to which medium-sized businesses and the crafts sector were also invited. Lindner then urged joint directional decisions from the traffic light government in the coming weeks.

He dismissed speculations about an imminent end to the coalition with the SPD and the Greens. "There is also something like a government obligation, and for Germany it is certainly better if a government finds a common direction, describes it, and implements it," he said.

Concrete results were not planned in advance for either meeting. Employers' President Rainer Dulger urgently called on the government after the FDP summit to overcome their differences and develop a joint strategy for all economic sectors. "It must jointly—and I emphasize jointly —implement the right economic policy to make this location competitive again."

Scholz, Habeck, Lindner: Each does their own thing

The industry summit, which Scholz initiated solo two weeks ago without his coalition partners, caused quite a stir. The reactions from Lindner and Economics Minister Robert Habeck (Greens) revealed how deep the rifts in the coalition have become.

Habeck presented a policy paper in which he calls for a multi-billion fund for more investments, which is hardly feasible with Lindner and Scholz. Lindner's FDP faction promptly organized a counter-summit.

Dürr: Germany should return to the Champions League

FDP parliamentary group leader Christian Dürr subsequently said, "I believe Germany should be playing in the Champions League again. That should be our aspiration." Dulger emphasized that the competitiveness of Germany as an economic location must again become the focus of the coalition's political actions. "We need to move from political posturing to action, and there must be delivery."

The German economy is in crisis, and forecasts predict 2024 to be the second consecutive year of recession. Industry associations have long been demanding comprehensive structural reforms: lower energy prices, less bureaucracy, measures against the skilled labor shortage, reduced social security contributions, and more money for the partially dilapidated infrastructure.

The traffic light coalition has announced a "growth initiative" with many measures. However, none of this has been implemented so far, and some points are contentious. Industry associations consider the plans insufficient.

Next summit right after the budget showdown

Six representatives of major companies participated in the summit with Scholz, including VW CEO Oliver Blume, whose crisis-stricken company is currently facing plant closures and massive job cuts.

Government spokesman Hebestreit subsequently made it clear that a continuation is firmly agreed upon: "This conversation is the start of a process in which the federal government, together with the participants in the coming weeks, will discuss possibilities for setting further growth impulses, securing industrial jobs in Germany, and strengthening Germany as an industrial location."

Whether Lindner and Habeck will participate in the next round remains unclear. However, Scholz needs the two coalition partners to implement measures. "It is clear that we will have to find a common position in the coming weeks, even just because of the timing for the federal budget 2025," said Lindner.

On November 14, the budget committee's fine-tuning session will take place, where the deputies aim to finalize the budget for the coming year. If the coalition cannot agree on how to close the remaining billion-euro gaps, it will be on the brink anyway. The next summit is scheduled for the day after this meeting.

Will the traffic light still be on by Christmas?

At an event in Cologne, Lindner evaded a journalist's question about whether the coalition will still be standing by Christmas. "I believe the times are too serious for us to advance coalition speculations," he said. "It's about finding solutions. The citizens expect the governments to deliver solutions."

Scholz also did not commit to a similar question during his trip to India over the weekend. A journalist wanted to know if the coalition would be celebrating Christmas together. "Christmas is always celebrated," he said.