German companies give a poor overall rating to the federal government’s economic policy, assigning an average school grade of 4.2 in a survey released on Thursday by the Ifo Institute. The criticism spans every policy area and is shared across all industries, with positive assessments being rare.
The lowest marks are for social and pension policy, averaging 4.6. Work‑market, industrial, energy, and climate policies fall between 4.1 and 4.2, barely meeting the “sufficient” threshold. Finance, infrastructure, and digitalisation receive slightly better average grades of 4.0, still only “sufficient”. Across sectors, industrial and service firms report grades ranging from 3.8 to 4.5, with none rating the overall policy positively. Even the best grades stay within the “satisfactory” zone, tending towards “sufficient” while certain sectors-such as manufacturing and labour‑market‑adjacent services-assign noticeably lower scores.
When asked about the most urgent areas for improvement, 40.4 % of companies prioritised reducing bureaucracy and regulation. The second most frequently cited demand, at 37.1 %, called for tax and duty reforms-especially tax cuts or system simplification. Other important topics include the labour market and skilled workers (24.6 %), energy policy (23.3 %), and investments, location conditions, and infrastructure (21.3 %).
“We now expect tangible progress on the core reform areas” said Klaus Wohlrabe, head of the Ifo survey. “Declarations alone no longer suffice”.
