Dramatic warning from Berlin: Germany in its deepest crisis since the founding of the Federal Republic

(Patria) - President of the Federation of German Industries (BDI) Peter Leibinger believes that Germany is in its deepest crisis since the founding of the Federal Republic.

Industrial production in 2025 will likely fall, for the fourth year in a row, analyzes Deutsche Welle.

The BDI warns that the national economy is in free fall.

- The industrial sector faces a dramatic situation at the end of 2025. Economically speaking, Germany is in its deepest crisis since the founding of the Federal Republic, but the federal government is not reacting decisively enough - Leibinger criticized the CDU/CSU and SPD Union.

The current BDI report predicts a (new) decline in industrial production of two percent this year. This would mean that the volume of industrial production has been decreasing for the fourth year in a row.

- This is not a cyclical, but a structural decline. German industry is continuously losing ground - said Leibinger.

However, the BDI is somewhat more optimistic regarding the European Union. According to their analysis, the industrial recession within the EU has likely already ended.

The BDI has revised its earlier forecast upwards and now expects industrial production to increase by one percent this year. The previous forecast predicted a decline of one percent.

And another piece of good news - the BDI does not expect the decline in German exports to continue in 2025.

The BDI report deals with various sectors, focusing among other things on the chemical industry. Recently, the capacity utilization of chemical plants in the country was only 70 percent.

Mechanical engineering and the steel industry are also under pressure. However, the situation in the construction industry seems to be stabilizing.

An increase in production is expected in the automotive sector, and capacity utilization has increased in the meantime. However, employment in the automotive industry continues to trend negatively.

Economic experts warn of the possibility of job losses in a key sector of the national economy.

- Germany now needs a fundamental change in economic policy with clear priorities regarding competitiveness and economic growth - emphasizes Leibinger.

Every month without decisive structural reforms will cost Germany further jobs and prosperity and will seriously limit the state's future room for maneuver, warns the head of the BDI.

Specifically, Leibinger demands that the federal government prioritize investments, not consumption. A special fund (from which hundreds of billions of euros are to be invested in infrastructure renewal and strengthening the economy) must be used transparently for additional investments, the BDI states.

Critics complain that the federal government is simply shifting projects from the state budget to this special fund for infrastructure and climate protection in order to then use the freed-up budget funds to finance various social welfare projects such as the so-called "mother's pension".

This is a measure adopted at the insistence of the Bavarian CSU. Its goal is to increase pension benefits for mothers (and fathers) by including the time spent at home (rather than at work) raising children in the pension calculation.