Reactions from abroad: Germany should stop “doing stupid things”

Now, after the election, many neighboring countries and economic partners hope that Germany will once again become the growth engine in Europe.

Italy

In Italy, the assessment was the same everywhere, from the front pages of the newspapers to the small talk over espresso at the bar: Merz won, but the AfD triumphed - Germany is moving to the right. The latter cannot be a deterrent in a country where an extreme right-wing government has been ruling relatively quietly for two and a half years. And people hope, especially in the business world, that Merz will act in a European way, as he promised during the election campaign. In Italy, there is a widespread awareness that we are dependent on our friendly foreign countries, namely Europe - and this always involves Germany.

The Italian automobile industry in northern Italy, as well as branches in the south as far as Sicily, are suffering massively from the difficulties in the northern neighboring country. In some plants, orders have fallen by 50 percent or more. The various interventions by the Italian Mario Draghi, former Prime Minister and President of the European Central Bank, that Europe only has a chance of competing economically against the USA and China if it works together, are still echoing and are being quoted a lot again these days. "A serious discussion about the Draghi report would do everyone good," says Carlo Bastasin, economics professor and Germany expert at the Luess University in Rome. The debate about loosening the debt brake in Germany is interesting, says Bastasin. If Merz sticks to the debt brake, he will at least have an incentive to vote for common European funds, at least for defense. That will strengthen Europe.

Politicians are also hoping for Merz: Prime Minister Meloni has already spoken to him on the phone, according to her office, and offered him immediate, close cooperation. Merz had spoken kindly about the post-fascist during the election campaign.

France

The inauguration of Friedrich Merz as chancellor has raised hopes in France that relations between Paris and Berlin will improve again. One prerequisite, however, is that the heavily indebted France becomes more credible in budgetary matters, writes the business newspaper Les Echos . At the same time, people in France have noted that Merz is much less hostile to nuclear energy than Olaf Scholz. For France, a country with nuclear power, this could make negotiations in Brussels on "green nuclear power" easier.

Germany must redefine its economic model, said economist Ludovic Subran, head of investment at the Allianz Group. In the French press, he presented a ten-point plan for how Germany's economy can grow faster again. One of the most important points is to abandon chronic austerity policies, the key word being the debt brake . 1,000 billion euros must also be invested in the energy transition by 2035 - and a further 600 billion euros in rail networks, schools and housing over the next ten years as part of public-private partnerships. In Europe, Germany must develop an idea for common debt mechanisms and a capital market union.

Austria

One of the most common phrases heard in Austria when it comes to economic issues is: If Germany has a cold, Austria gets the flu. The flu has now broken out in full force due to the German economy, which has been struggling for some time. Not only does a lot of money flow from Germany into Austrian tourism, one of the country's most important economic sectors, but Germany is also by far the most important economic and trading partner. The problems of the German automotive industry in particular have had an impact on Austria, with many suppliers suffering from a decline in orders from Germany and falling demand. This has resulted in some spectacular bankruptcies, with the Austrian motorcycle manufacturer KTM going bankrupt at the end of last year.

In this respect, people in Austria are looking positively at a possible Chancellor Merz and at the fact that, in addition to migration, he wants to tackle the economy in particular. Representatives of the Federation of Austrian Industries expressed their hope in the Austrian media that Austria would also benefit from the new German government in the end. A representative of the Chamber of Commerce of the federal state of Salzburg, which as a neighbor of Bavaria has particularly close economic ties with Germany, told ORF that a possible transformation process in Germany was an "opportunity" for Austria. All of this, of course, under the condition that a coalition is formed more quickly in Germany than in Austria, where 150 days have now passed without a new government.

Czech Republic and Poland

In the Czech Republic, conservative Prime Minister Petr Fiala is looking forward to a German government led by the equally conservative CDU; the country's own political camp is simply trusted to have more economic competence. This is especially true as Friedrich Merz largely shares the views of the Czech government - and many Czech citizens - on nuclear power, combustion engines and climate protection requirements. Germany is the most important sales market for the Czech Republic and Poland ; both countries expect economic growth this year, Poland of up to 3.5 percent, the Czech Republic of around 2.5 percent.

"I expect that German politics will now become stronger," said Prime Minister Fiala about the German election result. He hopes for more focus on "German and European problems," including "economic development." The Czech Republic is an important supplier to the German automotive industry, accounting for around a third of Czech exports to Germany, and sales here have recently collapsed.

Poland is currently doing so well economically that there are opportunities for German companies here, while the German economic downturn does not seem to be having a major impact on Polish companies at the moment. Donald Tusk's liberal-conservative government is investing massively - and does not care about debt. Poland is therefore interesting for German medium-sized companies that want to "open up new sales markets in view of the sluggish economy in Germany," says Lars Gutheil of the German-Polish Chamber of Industry and Commerce.

Spain

Spain's interest in Germany is enormous. The election evening was covered live on state TV. The next day, a foundation of the Caixa Bank invited people to a discussion forum with the political scientist and Germany expert Fernando Vallespín in Madrid. The turnout was so great that the lecture had to be transferred to a second room. Many representatives of the currently booming Spanish economy attended, and it was clear from the questions that people are following the events in Germany with trepidation. Will Friedrich Merz bring about the upturn? The debt brake (a word that Spaniards can hardly pronounce) also generated a lot of interest.

Adjusted for inflation, Spain's per capita economic output grew by 590 euros to 26,210 euros last year, while Germany's per capita GDP fell by 160 euros to 36,130 euros. On the surface, Spain can look forward to strong economic growth, which is also encouraging German companies such as VW to relocate production sites to Spain. But at least one of the pillars of this boom, tourism, is a fragile sector, as the Spaniards have been aware of since Covid at the latest. People are therefore looking uncertainly towards Germany, which is seen as the engine of Europe. But this very engine has "cooled down," the political think tank Elcano recently analyzed, naming seven weak points of the German economy, including export dependence, bureaucracy and an aging population.

The bottom line is that the election result is "both reassuring and inspiring" for Spain and its economy, says Walther von Plettenberg, Managing Director of the German Chamber of Commerce for Spain in Madrid. "A grand coalition between two leading centre-left and centre-right parties in Germany with a clear mandate to ease the burden on the economy promises greater stability in the traditionally admired but recently increasingly questioned partner country of the EU."

USA

The further away the country, the weaker the expectations that economists and entrepreneurs have of the new federal government. The US market, for example, is significantly more important for the German economy than vice versa. Nevertheless, US companies have invested more than 193 billion dollars in Germany. That is why the weaknesses of the German economy are being noted very closely there. The sluggish growth, the sluggish digitization and the high energy prices are also worrying the American partners - as is the fact that Germany would be particularly defenseless in a trade war instigated by Trump.

"US investors expect the next federal government to stop doing stupid things," says economist Jacob Kirkegaard from the Peterson Institute for International Economics in Washington. In the US, for example, there was incomprehension that Germany had abandoned nuclear power in the midst of the energy crisis resulting from the war in Ukraine. The economist interprets the positive mood on the stock market in the weeks before the election as a vote of confidence in the next federal government. Now it must deliver: "US investors hope for a more proactive fiscal policy. They expect a reform of the debt brake and higher spending on defense and energy infrastructure."

China

Lin Jian, spokesman for the Chinese Foreign Ministry, said very diplomatically on Monday that they wanted to work with the new German government "to strengthen and further develop the comprehensive strategic partnership between China and Germany." In view of the looming trade war with the USA, China is interested in an economically strong Germany that can lead the EU.

In the People's Republic, people fondly remember the CDU governments under Merkel, which greatly expanded German-Chinese relations over the years. Merz is not seen as the new Merkel, but in Beijing they hope that as a former businessman he will bring the necessary pragmatism to strengthen economic relations with China in the face of the Trump administration without getting caught up in ideological debates. Merz's critical stance on China during the election campaign is not seen as a cause for concern in Beijing: Merz is giving the German economy the stability and security that China attaches great importance to in economic relations, says one observer. Now that Europe and the USA are increasingly falling apart, the government in Beijing senses an opportunity to present itself even more strongly as a reliable trading partner for the Germans.