Tegernsee, Germany – Top German business leaders, economists and politicians, last week, rose to a small, picturesque Bavarian city, which is located next to the legendary Tegernsee -See to share their hopes and to discuss what is at stake for the New Government.
The participants of the summit were burdened by the recent positive market mood for the largest economy in Europe and were united in their call to the new administration to promise and honor. Any misconceptions would probably not be tolerated, with some managing directors warn that the government cannot allow itself, a “lazy summer”.
Despite the rain and low clouds, which formed a somewhat bleak setting of the event, which was called “Davos of Germany”, the promise of new beginnings enveloped the summit and the atmosphere buzzed with excitement for potential changes that the newly disappointed Chancellor Friedrich Merz could initiate.
The view over the Tegernsee from Ludwig Erhard Summit
Sophie Kiderlin, CNBC
The great expectations of the government were the order of the day because the concerns about the fighting economy in Germany and the latest political turbulence were apparently faded into the background.
The German Dax Index has currently increased by over 18% since the beginning of this year and has often reached record highs in recent months. However, the German economy has been in the stagnation area for over two years, with tensions about economic, financial and budgetary policy in the former ruling coalition and its later separation continue to burden expectations.
“There are now very high hopes for the new government,” said Patrick Trutwein, Chief Risk Officer and Chief Operating Officer of IKB Deutsche Industriebank AG, during one of Annette Weisbach moderated by CNBC.
He said that he feels positive about the future of Germany if the announcement of the great financial package in the constitution of Germany as well as other potential reforms and “an economy that is quite robust and can build on its own … productivity and skills”.
Matthias Voelkel, CEO of the Boerse Stuttgart Group, was one of the hopeful.
“If we look ahead and if you [the new government] Do the right thing, I'm optimistic, “he said to CNBC.
Gernot Dölner, CEO of Audi, said in a Fireside chat that he was confident that the new government “would send an impulse to the German economy”.
The mood was also optimistic in the German auto sector, which has long been struggling with the competition from China, the pressure from the transition to electric vehicles, and was recently met by US tariffs.
“The Germans are back,” said Hildegard Müller, President of the German Association of the Automotive Industry, on Friday by CNBCS Weisbach. “We are competitive,” she added.
A conversation at Ludwig Erhard Summit.
Sophie Kiderlin, CNBC
But in the middle of the positive sum it was clear that observers keep an eye on the governments with every movement.
“This new government in Germany cannot afford a political lazy summer, I'm sorry, you have to work and you have to work hard,” said Karl-Theodor zu Guttenberg, chairman of Spitzberg Partners and former German politicians.
Or, like Veronika Grimm, member of the German economic expert, to CNBC said: “A lot is ahead of us for the government.”
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The message was extremely clear: Germany has to bring its action together.
Alexander Horn, General Manager of Eli Lilly'S Germany ARM – Lilly Germany – said the business welcomes the goals of the new government, but no reservations.
“In particular, we expect the declarations of intent, which are located in the coalition agreement, quickly implemented, the speed plays an enormously major role,” he said during a panel according to a CNBC translation.
Boerse Stuttgart Group's Voelkelsse stated that its optimism was based on the government's actions and said that he was looking for steps towards “less bureaucracy, less anti-growth regulation, more innovation and in particular strengthening investments”.
The newly shaped German government has set itself as political goals and promises to increase the country's economy, reduce bureaucracy and to promote innovations and investments during the election campaign and in the coalition agreement.
“This country needs an economic change. After two years of recessions, the previous government had to announce again [a] Zero growth year for 2025 and we really have to work on it, ”German Minister of Economic Affairs Katherina Reiche told CNBC on the edge of the summit.
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