The number of corporate insolvencies in Germany climbed 5 percent in the first half of 2026 to roughly 5,940 cases, intensifying pressure on the federal government to act. The metal and electrical engineering sectors alone have shed around 270,000 jobs since 2018, while companies say bureaucratic costs — estimated at €65 billion annually — and high energy prices are pushing production abroad.
Against that backdrop, the Federation of German Industries (BDI) presented a stark warning at Wednesday’s coalition summit in the Chancellery: the economy will expand by only 0.4 percent this year without deep structural changes. BDI Managing Director Tanja Gönner called for an investment-friendly tax policy, saying Germany risked falling further behind without it.
The BDI’s concrete demands include capping social security contributions at 40 percent of gross wages, abolishing the solidarity surcharge entirely, and suspending the Supply Chain Due Diligence Act until the European Union’s directive is implemented in 2029. BDI President Peter Leibinger stressed that companies will only increase investment once political conditions shift decisively.
The German Chamber of Commerce and Industry (DIHK) echoed those calls. Chief Executive Helena Melnikov urged the government to abandon any further tax increases and pushed for flexible working hours, arguing that a weekly time limit should replace the current daily cap. Meanwhile, Jörg Dittrich, head of the German Confederation of Skilled Crafts (ZDH), warned that three out of four craft businesses effectively pay income tax as their corporate tax, and demanded equivalent relief for unincorporated enterprises. He said the welfare state must be reformed to be generationally fair, as ancillary wage costs have already hit their breaking point.
On June 29, the CDU parliamentary group published its own blueprint for strengthening the business location. It proposes permanently lowering energy costs by eliminating the gas storage levy and reducing the electricity tax to the EU minimum. For bureaucracy reduction, the group suggests reversing the burden of proof and imposing a moratorium on new regulations, applying a “one-in-two-out” principle.
The quick-service restaurant industry signaled it would invest €3 billion — enough for up to 600 new locations and 30,000 jobs — if conditions improve. Matthias Kutzer, president of the Federal Association of System Gastronomy (BdS), told the group’s late-June meeting that planning security and consistent reduction of red tape are prerequisites.
A McKinsey analysis underscores the urgency. The net investment rate in the European Union stands at just 2 percent of GDP, compared with 4 percent in the United States and 23 percent in China. Productive capital stock per employee reaches only $150,000 in Europe, against $340,000 across the Atlantic. Experts say faster permitting and standardized procedures are essential to make Germany attractive for investors again.
