Businesses Owned by Small and Medium Enterprises (SMEs) Assess Their Situation After 100 Days of Government Rule

Businesses Owned by Small and Medium Enterprises (SMEs) Assess Their Situation After 100 Days of Government Rule

After 100 days in office, Chancellor Friedrich Merz's new federal government is facing growing calls for action from Germany's Small and Medium Enterprises (SMEs). The Mittelstand Association BVMW e.V., a key representative of SMEs, has expressed cautious criticism, stating that structural reforms for SMEs are a political priority but remain a work in progress.

The association has highlighted several key areas that require attention. These include streamlining bureaucracy and permitting processes, improving access to venture and growth capital, and accelerating digitalization efforts to integrate SMEs effectively into the country’s industrial renewal and global competitiveness.

Germany's SME sector, vital for the economy, requires a more risk-tolerant innovation culture, targeted funding programs, expansion of digital infrastructure, and strengthening of digital skills to close the gap with leading innovation hubs like Silicon Valley.

While the new government has signaled industrial ambition, including an emphasis on a "Made for Germany" model, the reforms needed to enable SMEs to thrive—such as faster approval processes and better capital access—are still to be fully realized or implemented effectively.

The call for action is particularly urgent due to the uncertainty surrounding the electricity tax. Contrary to earlier announcements in the coalition agreement, the tax will not be reduced for all companies. This decision has raised concerns and fueled uncertainty within the SME sector.

Moreover, all measures are subject to financial caveats despite the creation of a special fund. Incremental progress from individual measures is insufficient to overcome investment caution among SMEs. The Mittelstand Association BVMW e.V. has evaluated the economic policy measures taken so far and finds that announcements outweigh tangible progress.

In light of these challenges, the association is advocating for binding implementation steps to secure Germany's long-term economic competitiveness. The call is for a "autumn of action" from the federal government, with concrete advances in key structural reforms such as bureaucratic reduction, social security reform, and effective investment incentives.

The patience of SMEs with the federal government is running thin, and it is clear that decisive action and concrete structural reforms, not just declarations of intent, are needed to meet the urgent expectations of this critical economic segment.

1. The Mittelstand Association BVMW e.V. has urged the new federal government to address other pressing issues, such as streamlining bureaucracy, improving access to finance, and fostering business digitalization, to ensure SMEs can effectively contribute to Germany's industrial renewal and global competitiveness.
2. The association has emphasized the need for the federal government to take decisive action in the upcoming autumn season, including binding implementation steps for bureaucratic reduction, social security reform, and effective investment incentives, to secure Germany's long-term economic competitiveness and meet the urgent expectations of SMEs.

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