Berlin must act quickly to fix the economy

German business leaders called for Berlin to form a new cabinet quickly on Monday, warning that Europe's largest economy cannot afford to waste time while companies are suffering from high costs, bureaucracy and increasing competition from abroad.

The CDU/CSU won the Sunday national elections, clearing the way for a new coalition government with the Social Democrats. This eased concerns about a potentially more fractured three-way system and prompted the corporate call to the parties to act quickly.

Germany's leading companies have been criticizing the government for years over the lack of action on energy costs. These are among the highest in Europe, and twice as expensive as in China or the United States.

Christian Sewing is the CEO of Germany's biggest lender, Deutsche Bank. He also serves as president of the German bank association.

"The challenges that our country faces are immense: the economy needs to be given a new start through fundamental reforms."

In a recent survey conducted by the German Chamber of Commerce and Industry, 60% of companies cited economic conditions as their biggest risk, the highest ever level. This included bureaucracy, high energy and labour costs, and bureaucratic red tape.

It has fueled fears of deindustrialisation, as many companies choose to invest in countries where the conditions are better.

Christian Bruch said that the German government must quickly recover its competitiveness. The democratic-centrist parties of Germany will need to form as soon as possible a coalition.

Energy policy is crucial. "The expansion of gas-fired plants, the strengthening and modernisation of the electricity grids, as well as a reliable supply of raw materials, are all essential." (Reporting and editing by Kirsten Doovan; Reporting by Christoph Steitz)

(source: Reuters)