Germans must work more to boost weak economy, BDA, Deutsche Bank say

Germans must work longer hours and retire later to increase economic growth, the heads of the employers’ federation, BDA, and Deutsche Bank said on Tuesday (16 April).

The long-term growth potential of the German economy has declined from 2.5% in the 1970s to just 0.5% today, according to data from the German Council of Economic Experts.

On top of that, the energy crisis of the last two years has compounded problems  for country’s manufacturing-heavy economy, resulting in particularly adverse growth expectations for 2024.

According to fresh figures released by the IMF on Tuesday, Germany is performing the worst among all major global economies – with economic growth estimated at 0.2% projected this year.

This, the head of BDA Rainer Dulger said, was also due to a shift in mindset in the workforce.

“Apparently, the concept of work-life balance has somehow been overdone. At least that’s my impression,” Dulger said at an event organised by the liberal FDP party.

While the number of people employed has increased from slightly below 40 million in the 1990s to 45.9 million in 2023 – praised by the current coalition government as ‘record employment’ – the overall amount of hours worked has remained the same, due to reduced working hours, Dulger said.

“I’ve always enjoyed working,” Dulger continued. “And I would love to see more young people in this country getting up in the morning and actually enjoying what they do.”

“Work must be valued more by the state, but also by society” he said, calling for “more respect for work and for those who create it.”

While the German government has recently adopted a reform to increase labour migration, “that alone will not be enough” to counter current labour shortages as well as the increasing number of workers retiring over the next few years, Dulger said.

The “economic turnaround” previously proclaimed by German Finance Minister Christian Lindner (FDP/Renew), “therefore also means increasing the number of hours worked by the people who already work here,” Dulger said.

Foreign investors ask for more dedication, Deutsche Bank chief says

Dulger’s views were echoed by Christian Sewing, CEO of Germany’s biggest lender Deutsche Bank, who said that foreign investors were ready to invest in Germany, but only if they saw high motivation among workers.

“I can tell you that I have been asked more than once on my trips what is going on with us Germans and what has happened to the creative and innovative power that has characterised us for decades,” Sewing told the conference.

Criticising proposals by, among others, Germany’s biggest trade union IG Metall,  for introducing a four-day work week in certain sectors, Sewing cited OECD data showing that an average worker in Germany at present works 25.8 hours per week – the lowest among all OECD countries.

Foreign investors “principally want to invest in Europe and Germany. But they are asking about the ability and motivation to perform,” Sewing added.

“The consequence for me is quite obvious: we have to work more, certainly differently, but also harder. We have to understand that we have to earn our prosperity before we distribute it,” he concluded.

The opinions voiced by the two business leaders on Tuesday align with the stance of FDP party leader Lindner, who has recently circulated the idea of exempting paid overtime from taxes to motivate employees to work extra hours.

“If you want to be at the top in terms of living standards, if you want to be at the top in terms of social security and if you want to represent top ecological and moral standards, you must also be prepared to show top performance again,” Lindner said at the same event.

[Editing by Anna Brunetti/Alice Taylor]

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