Some 42% of German economists view the country’s new federal government as either ‘rather negative’ (30%) or ‘very negative’ (12%), in a survey undertaken by ifo and Frankfurter Allgemeine Zeitung (FAZ).
A quarter (25%) of respondents had a ‘positive assessment’ of the government, however, citing in particular the greater focus on public investment and investment in defence.
100 days in office
The survey of 170 economics professors was undertaken to mark 100 days in office of new German chancellor Friedrich Merz, who leads a coalition between the Christian Democratic Union (CDU) and the Social Democratic Party (SPD).
Among the negatives cited by respondents are the lack of reforms in social systems, as well as a perceived lack of clear impetus for structural reforms, bureaucracy reduction, and climate protection.
Participants were also given an open-ended question in which they were asked to name economic policy decisions made by the German government that they considered to be either particularly successful or particularly critical.
‘The strengthening of public investment, made possible by the establishment of a special fund, was most frequently highlighted positively,’ ifo said. ‘However, 29% stated that they could not name a successful decision.’
The abolition of both the German Supply Chain Act and the gas price surcharge were among the other positives noted, as were an ‘investment booster’ for businesses, additional defence spending, and an announced reduction in corporate tax.
Areas that came in for criticism, meanwhile, included the expansion of the ‘mother’s pension’ and other pension policy changes, the reform of the debt brake, targeted electricity cuts on manufacturing, and ‘relying too heavily’ on fossil fuels such as gas.
Government continuity
As to the question of continuity with Germany’s previous government, 43% of economists said that they saw ‘little’ or ‘very little’ change in policy direction, while 17% were neutral on this issue.
More than two fifths (41%) said that they had seen significant changes, most notably in defence spending, with some also observing that business sentiment had improved.
The majority of economists rated the government’s economic policy competence as ‘medium’ (53%), with some 31% giving it a ‘low’ (26%) or ‘very low’ (5%) rating.
‘While some of the participating economics professors acknowledge economic policy competence – particularly in the case of the Chancellor himself and the new Minister of Economic Affairs – they criticise a lack of assertiveness within the coalition,’ ifo said. ‘Others criticise the stronger focus of economic policy on the interests of large corporations, which they believe is detrimental to small and medium-sized enterprises.’ Read more here.
