Merz tries to boost industry's confidence in German government

Chancellor Friedrich Merz is appealing for Germany's manufacturing community to have confidence in his government.

"We know that we have to solve problems from the political centre of our country," Merz told representatives of Germany's mechanical engineering industry gathered in Berlin on Tuesday.

"We have a stable government that has accepted the task of leading this country successfully," he added, and asked the engineering association to critically monitor the government's performance, but  with the necessary degree of confidence.

Germany's coalition of Merz's conservative CDU/CSU bloc and the centre-left SPD is united in its goal of making Germany a competitive location again, the chancellor said.

He said that it was vitally important to keep Germany's manufacturing industry in the country, and reiterated the need for reforms of the welfare state in view of rising costs.

He told the meeting that he had announced an "autumn of reforms," and promised to dismantle many existing regulations. "I imagine that in October we will hold a Cabinet meeting in which we will not pass a single new law, but rather abolish a whole series of existing laws and regulations," he said.

Earlier, the president of the Mechanical Engineering Industry Association (VDMA), Bertram Kawlath, had called on Merz to implement fundamental reforms to ease the burden on companies. "We are at a tipping point today, not only economically, but also socially," he said, adding that if the democratic centre failed to deliver, Germany's political fringes would benefit.

Kawlath described the situation in the industry as serious, and said  political hesitation on reforms comes at a high price. "More and more companies are facing deep cuts," he said. He called for lower taxes and levies, less bureaucracy and faster investment approvals.