The German Association for Small and Medium-Sized Businesses (BVMW) called on Prime Minister Friedrich Merz to demonstrate stronger and more decisive leadership within the coalition. BVMW Managing Director Christoph Ahlhaus stated that Merz has not displayed a sufficiently distinct leadership profile. Ahlhaus also criticized the government's communication policy.

The continuous discussion of issues such as the 63-year retirement age policy and reforms in the healthcare sector has eroded public and business confidence in the government. Ahlhaus noted that if Prime Minister Merz does not adopt a clear and decisive management approach, the coalition could face the risk of collapse in the medium term. He emphasized that the government needs to be more consistent in the messages it conveys to the public.

Ahlhaus also criticized the public disclosure of proposals on which no consensus had been reached among coalition partners. He stated that this situation created significant uncertainty in the planned pension reform discussions.

BVMW Managing Director Christoph Ahlhaus called on Prime Minister Merz to end discussions about increasing the Value Added Tax. It was stated that the BVMW sent a letter to Finance Minister Lars Klingbeil and Economy Minister Katherina Reiche. The association demanded the lifting of the decision to halt support applications for research and development projects.

The halt of applications for the Central Innovation Program for Small and Medium-Sized Enterprises (ZIM), which supports innovative projects of SMEs in Germany, has put companies in a difficult position. The BVMW reported that many companies that had reached the application stage were forced to postpone or completely cancel their projects. It was stated that hindering such investments harms the economy at a time when Germany needs more investment, research, and growth.

The ZIM program, which supports innovative projects of medium-sized businesses across Germany without distinction by technology or sector, is expected to be relaunched shortly after the cabinet meeting.

The BVMW demanded a clear message from the government regarding the creation of a permanent financing model to prevent new incentive cuts in the 2027 federal budget.

Baba Agency/Berlin