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Time of crisis: Economy is shrinking – public holidays gone for more growth?
The German economy is stagnating: Experts are discussing holiday cancellations as a possible solution to labor shortages and GDP growth.
Time of crisis: Economy is shrinking – public holidays gone for more growth?
The German economy has declined in size over the past two years, and forecast data for 2025 suggest stagnation in economic output. The topic is currently being intensively discussed in political and economic circles. Employers' associations and business-related institutes have put forward proposals to abolish a public holiday in order to stimulate the economy. Chancellor Friedrich Merz of the CDU has made it clear that he believes it is necessary to work more to improve the current situation. These considerations were covered in the latest episode of the “To the Point” podcast, which airs Monday to Friday at 5 p.m sueddeutsche.de reported.
A prominent face in this debate is Michael Hüther, director of the German Economic Institute (IW Cologne). He calls for the abolition of a public holiday on the grounds that such a measure could increase economic output in the short term and effectively. According to IW calculations, an additional working day could increase Germany's gross domestic product (GDP) by up to 8.6 billion euros. Hüther also refers to the cancellation of the day of repentance and prayer in 1995, which sparked similar discussions, reports berliner-zeitung.de.
Opposite positions
The view of Marcel Fratzscher, President of the German Institute for Economic Research, contradicts Hüther's argument. Fratzscher emphasizes that the problem of labor shortages cannot be solved simply by canceling public holidays or tax privileges for overtime. He sees the key to the solution in particular in removing hurdles that stand in the way of employment for women, refugees and other people from abroad.
Fratzscher calls for a significant increase in immigration and improved integration in order to counteract the shortage of skilled workers. This shows that the discussion about Germany's economic performance is more complex than it seems at first glance and that different approaches to solutions must be pursued. At the same time, it remains to be seen how policymakers will respond to these proposals and what strategies they will implement to address the economic difficulties.