The conservative candidate for Chancellor, Friedrich Merz, has accused his social democratic rival, Olaf Scholz, of causing a “deindustrialization” of Germany. Merz made this statement during the first electoral debate between the two rivals, which was broadcast on the ZDF and ARD public channels. He pointed out that the country is experiencing its third year of recession, with three million unemployed and an upward trend of 700,000 vacancies that cannot be filled. Additionally, Merz noted that there has been a wave of insolvencies in the last 15 years, with 50,000 more companies breaking in Germany during Scholz’s term, almost half of them in the last year.
Merz emphasized that this is a clear example of deindustrialization, with 300,000 jobs lost in the industry and a capital exit from Germany. He stated that industrial companies are going abroad, taking their money with them, and that it will require a great effort to stop this trend. Merz also criticized Scholz’s handling of the economy, saying that “we have never seen anything like this in the history of our country.”
In response, Scholz denied that there is a deindustrialization of Germany, citing the country’s high industrialization rate among G7 nations and its high GDP. He also pointed out that there are 46 million people employed, a figure that is increasing, and that the unemployment rate is the second lowest among G7 countries. Scholz emphasized that this is a good starting point for guaranteeing growth and supporting the economy. He also highlighted that over 100 billion euros have been invested in new production in Germany.
The two candidates also disagreed on the proposal to create a “made in Germany” fund with 10% fiscal bonuses to those who invest in the industry. Merz argued that this proposal is not financed and is therefore an “illusion.” Scholz responded by saying that the fund would help to support the industry and create jobs.
Merz also criticized Scholz’s decision to close three nuclear plants when gas was needed most, following Russia’s interruption of gas supplies to Germany and Europe. Scholz replied that he did not invade Ukraine or cause the rise in gas prices and therefore inflation.
In terms of their economic recipes, both candidates emphasized their differences. Merz proposed tax relief for the middle class, while Scholz suggested increasing taxes for the wealthy. They did agree on the need to reduce bureaucracy and reform the debt brake, which limits Germany’s indebtedness to 0.35% of GDP per year.
Regarding potential tariffs from the US, Merz implied that the EU could react quickly, citing the example of the 2018 tariffs on European products, which were eventually solved through dialogue. Scholz accused Merz of being naive, emphasizing that Germany is a strong export nation and would suffer under American tariffs. He stated that the EU is prepared to react “in an hour” to any US tariffs against the 27 member states.
According to recent polls, the conservatives are currently leading with 30% of the votes, followed by the ultra-right at 20%, social democrats at 15-16%, greens at 13-15%, and the left at 6%. The liberals and populist left are currently outside of the parliamentary threshold.