Business leader: AfD would cause German economy 'lasting damage'

The far-right Alternative for Germany (AfD) would cause "lasting damage" to the country's economy if it takes power, a top business leader said on Tuesday.

Bertram Kawlath, president of the Association of German Mechanical and Plant Engineering (VDMA), told Deutschlandfunk radio that the AfD's opposition to the European Union is a serious issue.

The comments came in response to a controversial announcement by the Family Business Association last week that it was dropping its ban on contacts with the anti-immigrant AfD, Germany's largest opposition party.

The group subsequently reversed its position on Sunday following an uproar among member companies such as pharmacy chain Rossmann and drinks manufacturer Fritz Cola.

The approximately 3,600 member companies represented by the VDMA generate 44% of their sales in Europe, Kawlath said. "Then along comes a party that says we should leave the EU."

In addition, the euro has been a huge boost to the German engineering industry, Kawlath said, warning that the AfD wants to drop the common currency.

There is also no agreement on security policy, as the AfD wants Germany to leave NATO, the VDMA leader said.

The party's views on inheritance tax and income tax may overlap with the demands of the business community, but agreement on core pro-European principles is far more important, he added.

Kawlath said the Family Business Association's decision was a "desparate act," but warned that Chancellor Friedrich Merz's government must get its act together to implement much-needed reforms to counter the AfD's rise.