Savings Bank President Reuter: More investments, less bureaucracy

Despite high levels of pressure, small and medium-sized businesses are holding their own. However, they urgently need investment—including private capital—and a new entrepreneurial spirit, according to the German Savings Banks Association (DSGV). What are the prospects?

This article is part of the special topic Bureaucratic madness in the craft industry

Despite high energy prices, a growing shortage of skilled workers, rising labor costs, and the challenges of digitalization, German SMEs remain a key pillar of the economy. This is the conclusion of a recent analysis by German Savings Banks and Giro Association (DSGV) Hervor.

The financial situation of SMEs remains stable, reports the German Social Insurance Association (DSGV). The average equity ratio remains stable at 37 percent, which speaks to the robustness of SMEs, which have weathered the crises well.

Strengthening corporate culture: Solutions for rising costs

Dr. Ulrich Reuter, President of the German Savings Banks Association Photo: © DSGV

But rising personnel costs (most recently up seven percent) and high energy and material costs are increasingly suffocating companies. "The foundation on which our prosperity rests is coming under pressure," explained DSGV President Ulrich Reuter. Small and medium-sized businesses should be a greater focus of economic policy, as the shortage of skilled workers is also becoming an increasing problem. Small and medium-sized businesses must be "nurtured and nurtured," Reuter said.

Because: "Three out of four companies cannot easily pass on rising energy costs to their customers." This weakens sales returns in some sectors. Building construction and energy-intensive industries are particularly affected.

For 2024 to 2026, the Growth prospects overall positive. Especially for sectors such as IT, healthcare, sports, personal services, and recreation. "We are also seeing positive developments in civil engineering and the expansion of heating networks, power lines, and broadband lines," the association president told the press. The challenges can be solved if the entrepreneurial spirit is rekindled. "Today, there are eleven employees for one self-employed person; ten years ago, the ratio was nine to one. The entrepreneurial spirit is waning. It is therefore crucial that we Strengthening the start-up culture in Germany."

Mobilizing private capital

In order to secure the long-term economic success of medium-sized companies, the Savings Banks and Giro Association expects More investment in infrastructure – in more efficient digital administration, in well-developed railway lines and waterways, more efficient power grids and nationwide broadband networks.

"Germany and Europe can only catch up with the USA and China if economic growth is at the center of the political agenda," stresses the DSGV President. However, all investments cannot be financed by public budgets alone. That is "completely out of the question." The task is too large for that. Therefore, the decisive factor now is the Mobilization of private capital. "Savings banks can play a crucial role here by mobilizing private capital."  

Bureaucratic madness: warnings from the butcher

For the future of Europe, it is crucial that companies are willing and able to invest. Tax relief for companies and one "determined reduction of bureaucracy". "The stranglehold of bureaucracy must be relaxed to create more flexibility for companies," said DSGV President Reuter. On average, a self-employed person spends one day a week dealing with bureaucracy.

Reuter introduces Example from the butcher trade "Butchers must use a warning sign to draw attention to things that are self-evident. For example, that customers Heat minced meat before eating must. Apart from Mett and Tatar, you're not allowed to eat raw minced meat, everyone knows that. But anyone reading such a notice wonders if there's something wrong with the product—and with the bureaucracy.

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