(de-news.net) – Ifo President Clemens Fuest has called upon the Federal Government to formulate and implement a far-reaching reform initiative that substantially exceeds the scope of the current coalition agreement. This appeal follows the publication of a recent analytical report by the Ifo Institute, which examines the prevailing economic conditions in Germany and highlights several areas of concern.
The study’s findings reveal that public consumption has increased by nearly 25 percent since 2015, while corporate investment has simultaneously declined and now remains at the same level as it was in 2015. Commenting on these developments, Fuest stated: “Private investment is falling even as government expenditure continues to rise. This inverse trend poses a significant threat to Germany’s economic trajectory, as reduced private investment typically leads to slower growth over the medium term, diminished tax revenues, and consequently fewer financial resources available to sustain public services.” Fuest further observed that the average standard of living has remained stagnant for an extended period, noting that “millions of citizens are already experiencing a tangible decline in their quality of life.”
Among the measures proposed, the head of Ifo advocates for substantial reforms to social policy, including the termination of the so-called ‘mothers’ pension.’ He emphasized that the government should instead prioritize the stabilization of contribution rates, which he views as essential to maintaining fiscal sustainability. In addition, Fuest recommended a systematic reduction of bureaucratic burdens on businesses. This would entail eliminating various regulatory requirements, such as documentation obligations related to supply chain compliance, minimum wage enforcement, and CO₂ emissions verification.
According to Fuest’s estimates, such deregulatory measures could generate up to 146 billion euros in additional economic value annually. He concluded by stressing that the Federal Government must present a fully developed and comprehensive reform strategy no later than the spring of 2026.