By Christian Kraemer<\/p>\n
WASHINGTON (Reuters) -Germany’s Mittelstand could invest much more but is hesitating because reforms to strengthen the country as a business location are still lacking, the president of the German Savings Banks Association (DSGV) told Reuters.<\/p>\n
German Chancellor Friedrich Merz took office in May promising to revive stagnant growth following two years of economic contraction.<\/p>\n
While it was clear that Merz’s promised rise in public spending would take time to benefit the economy, there is a growing sense that the promised reforms are slower and less far-reaching than initially expected.<\/p>\n
“The Mittelstand has solid fundamentals, a reasonable equity base and therefore the capacity to invest,” DSGV President Ulrich Reuter said in an interview on the sidelines of the International Monetary Fund meetings in Washington.<\/p>\n
Germany’s small and medium enterprises, known collectively as Mittelstand, are the backbone of Europe’s biggest economy.<\/p>\n
Reuter added that there was no lack of liquidity either.<\/p>\n
“In absolute terms, in the first six months the savings banks issued as many new loans as are available from the special fund for modernizing infrastructure, on a pro rata basis, for the entire year,” Reuter said, comparing it to the 500 billion euro ($581.90 billion) German government fund.<\/p>\n
Although there was a 16% increase in loans year-on-year, the money was used mainly to replace previous investment, he said.<\/p>\n
“Companies are doing only what is absolutely necessary,” Reuter said. “What’s missing are future-oriented investments.”<\/p>\n
MITTELSTAND WAITING FOR THE PROMISED REFORMS<\/p>\n
The “autumn of reforms” promised by Merz has not arrived yet, according to the DSGV president.<\/p>\n
“The approaches are good, but more needs to come,” Reuter said. “Take the pension system as an example: if the pension level is to be maintained and contributions are not to rise, people have to work more and longer. That’s pure mathematics.”<\/p>\n
Germany’s cabinet agreed on a draft law on Wednesday to encourage work after retirement by allowing those who do so to earn up to 2,000 euros a month tax-free, but raising the retirement age is not part of the government coalition agreement.<\/p>\n
More private investment is needed for a sustainable economic recovery, according to Reuter.<\/p>\n
“To that end, the brake on the Mittelstand must be released,” he said.<\/p>\n
($1 = 0.8593 euros)<\/p>\n
(Reporting by Christian Kraemer; Writing by Maria Martinez; Editing by Jamie Freed)<\/p>\n","protected":false},"excerpt":{"rendered":"By Christian Kraemer WASHINGTON (Reuters) -Germany’s Mittelstand could invest much more but is hesitating because reforms to strengthen…\n","protected":false},"author":2,"featured_media":503457,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5310],"tags":[164975,133295,2000,299,1945,15439,1824,12705,123053,164976,164974],"class_list":{"0":"post-503456","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-dsgv","9":"tag-economic-contraction","10":"tag-eu","11":"tag-europe","12":"tag-friedrich-merz","13":"tag-german-chancellor","14":"tag-germany","15":"tag-international-monetary-fund","16":"tag-mittelstand","17":"tag-savings-banks","18":"tag-ulrich-reuter"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115382413573633483","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/503456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=503456"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/503456\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/503457"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=503456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=503456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=503456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}