Scholz vows to boost growth, reduce bureaucracy

Germany's Chancellor Olaf Scholz is calling on opposition parties and regional governments to support cutting through the "thicket of bureaucracy" that hinders Europe's largest economy, amid low poll ratings and perceived internal discord midway through his term.

Given deep concerns about sluggish economic growth and slow-paced reform, Scholz called on Wednesday for a "Germany pact", a cooperative effort among the Berlin government, federal states, municipalities, and opposition parties, aimed at reinvigorating the country.

The pact would seek to accelerate streamlining of lengthy planning processes, expedite the country's notoriously slow digitization, and hasten new home construction, reported The Associated Press.

"Only together will we shake off the mildew of bureaucracy, risk aversion, and despondency that has settled on our country over years and decades," he stated in a Bundestag address.

Scholz spoke after the leader of the opposition conservatives, Friedrich Merz, of the Christian Democratic Union, or CDU, claimed that bureaucracy was "suffocating" the country.

Scholz again acknowledged that the three parties in his so-called "traffic light" coalition, with the Greens and liberal Free Democrats, "have argued too much in recent months", having previously said last week that his government will tone down persistent infighting.

Amid a slew of polls indicating public pessimism about the economy and growing disenchantment with mainstream politics, support for Germany's ruling coalition has dropped to its lowest since Scholz took office as chancellor in 2021.

The International Monetary Fund and Organisation for Economic Cooperation and Development have both warned that Germany will have the slowest growth among major economies this year, noted the Financial Times newspaper.

The Kiel Institute for the World Economy on Wednesday revised its forecast for the German economy to a 0.5 percent contraction from the earlier prediction of 0.3 percent, due to "weak industrial activity, the construction sector crisis, and low consumer spending".

According to a survey published on Sunday by Germany's Bild newspaper, only 38 percent of voters would currently support Scholz's Social Democrats or their coalition allies, a significant decrease from the 52 percent who backed them in the last Bundestag election.

Recent studies indicate a growing unease, with 50 percent of voters fearing Germany will lose its top-tier global economic status in the next decade, 73 percent expressing dissatisfaction with the coalition government, and 51 percent believing Scholz's performance has been poor, reported The Times newspaper.

With about 27 percent of the vote, the center-right opposition, made up of the Christian Democratic Union, or CDU, and the Bavarian Christian Social Union or CSU, leads in the polls.

The hard-right Alternative for Germany, or AfD, party has capitalized on the disillusionment, surging to second place with stable poll ratings around 21 percent, nearly double since the last election, amid rising immigration and green policy concerns.

In comments interpreted as a reference to the AfD, Scholz said the only way to defend the country against "those who want to draw political profit from scenarios of decline and panic mongering" was to find a new national momentum.