The economic situation in Germany has reached a boiling point, and leading industry representatives are openly saying they are losing patience with current policy.

The president of the Confederation of German Employers' Associations (BDA), Rainer Dulger, issued a sharp warning to the federal government, demanding urgent and deep reforms that would prevent further lagging behind other industrial nations. As reported by t-online, Dulger is particularly critical of Chancellor Friedrich Merz's lack of decisiveness, pointing out that cosmetic changes are insufficient at a time when the German economy has been stagnating since 2019.

Radical proposals to curb absences from work

One of the most controversial proposals that has sparked strong public reactions concerns changing the sick pay system. Dulger believes that current sick leave rates, especially in the public sector, are unsustainably high and proposes the introduction of a so-called waiting day. Under that model, employers would not be obliged to pay wages for the first day of illness; instead, that financial burden would be shifted to the employee, with the possibility that the missed working day could be made up later. In the employers' view, such a measure should reduce the number of short-term absences and prevent potential abuse of the system, thereby returning the focus to workers who truly need help due to long-term health problems.

Dissatisfaction with Chancellor Merz's pace of reforms

Although economic forecasts for the current year predicted slight growth of 1 percent, business representatives warn that those figures are misleading and insufficient for a real recovery. Dulger emphasizes that the welfare state in Germany consumes about 41% of total government expenditure, which is the highest level in Europe, and that such a system stifles investment and competitiveness. Chancellor Merz, in whom business circles had placed great hopes, is now being asked to undertake major changes to the pension and healthcare systems in order to reduce labor costs. Employers say that social insurance contributions should fall below the 40% threshold so that employees would retain more net income, which would also be an incentive for greater work engagement.

Increasing the number of working hours as the key to progress

In addition to changes to the sick leave system, proposals to extend working life and abolish early retirement without deductions are also on the table. Dulger points out that an aging society cannot maintain prosperity while constantly reducing working hours, which is why he advocates encouraging full-time work instead of the increasingly popular shortened-week models. Even the discussion about abolishing at least one public holiday is considered a legitimate topic if it would contribute to increasing the overall economic volume. Criticism has also been directed at bureaucratic obstacles which, despite promises of digitalization, continue to hamper the day-to-day operations of German companies.

The necessity of structural changes in healthcare

The issue of financing the healthcare system also requires urgent state intervention because the current model places too great a burden on contribution payers. According to BDA estimates, the state should assume the full cost of health insurance for social assistance recipients, which would bring health funds an additional 10 billion euros annually and make it possible to reduce contributions for workers. Instead of raising taxes or introducing new levies, employers see the solution in digitalizing the hospital system and better cost control. The message sent to Berlin is clear: if the government does not dare to make radical cuts, frustration in the economy could grow into a serious crisis of confidence with long-term consequences.

We are at a moment when the German business sector is no longer choosing its words in communication with the political leadership, setting clear ultimatums before Chancellor Merz.

The proposal not to pay for the first day of sick leave is only the sharpest tip of the iceberg of deep dissatisfaction with a system considered sluggish and too expensive for global market competition. While unions are predictably announcing resistance to any attempt to reduce workers' rights, it remains to be seen whether the government will have the political courage to implement reforms that employers call a matter of survival, or whether Germany will continue on a path of controlled stagnation.