Germany's economic problems are escalating into a full-blown crisis. Following on from many other indicators, the Ifo Business Climate Index, one of the most reliable signalling devices for the economy, is now falling once again. For the third time in a row! This in itself makes it clear that the downturn is accelerating. The data also signals that companies have essentially given up hope of an improvement. This is because overall economic expectations are also gloomier.

This is a dangerous mix. In a vicious circle of increasing pessimism, correspondingly restrained purchasing and investment behaviour and the resulting poor economic data, the situation is darkening dramatically. Then there might be no stopping the downward slide. Adverse reports about insolvencies, complaints about poor business conditions in Germany, and a constant flow of news about a narrow-minded bureaucracy that stifles any economic impetus, further intensify the downward pull.

The „growth initiative“ launched by the traffic light coalition government in the summer is no longer enough to reverse, or at least halt, this trend. It was already criticised in July for being too selective and too timid. What's more, the first positive effects would probably not be seen until 2025.

Instead, we now need a real growth booster! The public must believe that the coalition government has understood the seriousness of the situation– and is acting accordingly. For example, credible tax reform could turn the tide, and regulatory relief could free the existing growth forces from bureaucratic shackles, and give companies a viable perspective again. However, if the German government instead once again sends out the faith healers from its ranks to the microphones, it might as well pack its bags.

But it would also be time for the CDU/CSU opposition to demonstrate the economic competence ascribed to them – and present their agenda. For a start, a convincing programme with ten concrete measures to combat economic decline would be enough. But if it continues to act merely as a spectator and commentator from the sidelines, spouting platitudes, it will just be a pipe dream. Fail grade! Advancement to the federal government jeopardised!