VDA Statement

    VDA President Hildegard Müller on the presentation of the annual economic report

    Berlin, February 20, 2024

    VDA President Hildegard Müller:

    "The annual economic report rightly confirms the urgency of reforms and a change of course in German economic policy, but lacks any comprehensive reform proposals. The forecasts give no reason for hope; we are only narrowly avoiding another recession and are therefore unfortunately at the bottom of the list when it comes to economic growth in Europe.

    The analysis in the annual economic report - and the approaches to answers - disappointingly don’t suit the explosive nature of the development. There is no doubt that we have difficult conditions and stressful exogenous factors - but these are not limited to Germany. The generally deteriorating competitiveness of our location is only discussed with reference to “structural challenges” that have accumulated. The fact is: we are increasingly falling behind in international comparison because Germany as a whole has lost massively in attractiveness as a location and continues to lose it. We must take decisive action to counter the danger of deindustrialization with concrete measures.

    Given the current situation and the clear words and warnings from business and science, it is incomprehensible that the need for fundamental reforms and decisions has not been recognized and stated. Accordingly, the measures listed by the federal government in the report fall short of what would be necessary now. Correct and important fields are addressed - such as the Growth Opportunities Act to strengthen innovation dynamics, the Bureaucracy Relief Act and the bureaucracy practice checks, the electricity price package, the improved employment incentives for older people and second earners or strengthening resilience through the conclusion of trade agreements - but that is not enough. In addition to the fact that many announcements must also be implemented promptly, these measures are not enough.

    There is still lacking an act of liberation, a courageous and comprehensive agenda that will bring us back to the international forefront in terms of competitiveness. Unfortunately, it is still doubted whether the federal government has really recognized the seriousness of the situation.

    With a view to the ramp-up of e-mobility, the report mentions that the federal government, automobile manufacturers and unions have set the 'common goal' of '15 million fully electric vehicles on the roads in Germany by 2030'. This goal was set politically. We are making our contribution and have met all the prerequisites for this. From 2024 to 2028, manufacturers and suppliers to the German automotive industry will invest around €280bn in research and development worldwide. The focus is on transformation, especially electromobility including battery technology, autonomous driving and digitalization. German manufacturers alone will produce significantly more than 15 million electric cars by 2030. The markets in which they are sold and where they are built depend on the respective framework conditions. The fact that the federal government, as mentioned in the report, is 'doing everything necessary to achieve this goal' is not consistent with the abrupt abolition of the environmental bonus, the still too slow expansion of the charging infrastructure or the lack of a strategy for cheaper energy prices."

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