DSGV President Reuter: Economic growth and a greater performance orientation are key to prosperity

“Germany’s economic strength is based on the premise that we are, and will remain, a democratic and open-minded country - where people treat each other with respect and tolerance”, said DSGV President Ulrich Reuter today during the presentation of the Common Economic Forecast of the chief economists of the Savings Banks Finance Group. Germany was facing significant economic challenges, he noted. Many people worried about the future. It was all the more important to secure and strengthen the foundations of economic success for the future. For this purpose, Germany would need to focus on its strengths and hold its ground in a new global world.

Only climate-friendly economic growth would enable Germany to preserve its prosperity. Reuter went on to state that “this can only be achieved if all the people in Germany who are able to work make a joint effort and if they are willing to work harder”.

In the view of the chief economists of the Savings Banks Finance Group, Germany’s gross domestic product would grow at 0.3 percent in the current year. Dr Ulrich Kater, the chief economist of DekaBank, drew attention to the fact the economic development in Germany was both under structural and economic pressure. However, an improvement was in sight: “Private consumption is recovering because inflation has continued to ease. At the same time, people are becoming accustomed again to sustained higher interest rates, which will stimulate investments. Last but not least, exports will rise again, which will be particularly important for Germany’s export-oriented economy.”

Reuter emphasised that policymakers would need to focus on maintaining and improving the framework conditions for Germany’s competitiveness. In this context, the DSGV President stressed that there was a need for secure and cost-efficient energy supply, a greater international orientation and diversification of Germany’s economy, with more international partners, the selective use of new technologies and AI, and the promotion of a new performance culture. He added that Germany was firmly anchored in the European Union and, hence, in the Single European Market, which was fundamental for Germany’s economic prosperity. “Anyone who wants to loosen the European links will make Germany poor”, said Reuter.

“Now is not the time to ask for shorter working hours. On the contrary, all of us will need to roll up our sleeves to work our way out of the current difficulties”, Reuter pointed out. Performance and additional work should therefore be promoted and rewarded. One option, for instance, would be to reduce the tax burden on additional hours worked above a defined minimum, or to reward the voluntary prolongation of an individual’s working life more highly in terms of taxation or social security contributions.

Reuter confirmed that the Savings Banks Finance Group was willing to support and finance the path towards greater performance and higher competitiveness. As the most important partner for loans to enterprises in Germany, the Savings Banks Finance Group was focused on providing stable financing and thus supporting enterprises on their path towards developing a more sustainable business model.