19.03.2026 - “The German and European economies are facing new challenges due to the war in the Middle East and the resulting global disruptions. At least in Germany, the expected slight economic recovery is being dampened by rising oil and energy prices. The federal government is struggling to find the appropriate economic policy response to these increased energy costs. The European Central Bank (ECB) was also confronted with a challenging task that required careful judgement. The risk of economic stagflation in Europe is real: If the ECB had raised interest rates now, it would have further weakened Europe’s already low economic growth. On the other hand, cutting rates would have fuelled cost-driven inflation. This was truly a choice between Scylla and Charybdis – one can therefore understand the ECB's decision to leave interest rates unchanged for the time being.

The ball is still in the court of realpolitik. For Germany, the economic policy agenda is already clearly laid out. The federal government should focus its measures consistently on growth triggers. Germany needs reforms that unleash economic dynamism and tap the potential of our economy. The current IHK economic survey clearly highlights: For businesses in Germany, labour costs, bureaucracy, and energy prices are the biggest business risks. Here is where the federal government must act. The German economy needs bold packages of reform and relief that make Germany a more attractive business location and create a framework that inspires companies to invest confidently. Improved conditions for businesses domestically are the best resilience factors, even in the face of uncertain geopolitical developments.”