EDITORIAL. In the general debate on the 2026 budget on September 24, 2025, Chancellor Friedrich Merz (CDU) delivered a 26-minute defense speech to the German Bundestag, which revealed itself as a helpless plea for "real reforms." Instead of concrete plans to establish Germany as an innovation powerhouse, he presented vague announcements about economic growth and social reforms that ignore the looming collapse of Germany as a business location. The debate, the highlight of budget week, revealed Merz's failure: under his leadership, the economy is stagnating, while competitors like the USA and China are exploding in AI, green technology, and digitalization. Hard facts underscore the disaster – and Merz's rhetoric seems like a desperate attempt to cover up his own incompetence.
The speech: Defensive, lacking substance, out of touch with reality
Merz began with a grim diagnosis: Germany was in the "most challenging phase of recent history," threatened by geopolitical tensions, energy prices, and bureaucratic hurdles. He announced a cabinet retreat where "only competitiveness and state modernization" would be discussed, and promised 100 billion euros for state investments in schools and daycare centers. However, he only superficially addressed innovation – the core of a modern economy: He mentioned "technological developments" as a solution for climate protection and growth, without naming a single measurable goal. Instead, he attacked opposition figures like the Greens and the Left as obstructionists and appealed to the citizens: "We can do this." The reaction in the plenary was lukewarm: many members of parliament left the hall, and critics like Britta Haßelmann (Greens) accused him of having fled even before the UN General Assembly in New York to avoid facing the debate.
This defensiveness fits Merz's approval ratings: According to the RTL/ntv trend barometer from September 23, 2025, 70 percent of Germans are dissatisfied with him – an all-time low, which his government brands as a "debt coalition" (AfD criticism). Alice Weidel (AfD) dismantled the budget draft as a "betrayal" of the citizens, while SPD members like Heike Heubach (the first deaf member of the Bundestag) symbolically represented the government's social ignorance. Merz's speech was not a change of course, but an admission of guilt: he conceded that "structures must be changed," but named no deadlines or budgets for innovation promotion.
The innovation failure: Facts Merz must ignore
Germany, once the world champion of exports, is rapidly losing its innovative edge under Merz's chancellorship (since May 2025). The hard truth: GDP growth in 2025 has so far been a meager 0.2 percent – a light recession, caused by high energy prices (up to 40 cents/kWh for industry), excessive bureaucracy (average project planning time: 7 years), and a lack of digitalization investments. In the Global Innovation Index 2024 (latest available data), Germany slipped to 9th place – behind Switzerland, Sweden, and the Netherlands, but especially behind South Korea (5th place) and the USA (3rd place), which dominate in AI patents and biotech. Germany grants only 1.2 percent of global AI patents annually, while China secures 40 percent and the USA 25 percent.
Companies speak out: At the "secret summit" with business leaders on September 22, 2025 (BDI, BWE, etc.), CEOs like Peter Leibinger (BDI) demanded "more speed" in reducing bureaucracy and criticized the EU – Merz's response: "We are going full steam ahead," without specifics. The initiative "Made for Germany" (61 corporations, including BMW, SAP, Nvidia) announced investments of 631 billion euros by 2028, but experts like Clemens Fuest (ifo) see this as PR, not a turnaround: Many projects were already planned, and the Mittelstand – 99 percent of companies, 60 percent of jobs – is missing, as it suffers from rising social security contributions (up to 50 percent of labor costs) and a lack of relief measures such as electricity tax reductions. Former FDP leader Christian Lindner criticizes: Merz's summit is "short-sighted" and ignores the Mittelstand as an engine of innovation.
Merz's proximity to lobbyists exacerbates the failure: As a former lawyer for BASF and BlackRock (million-dollar income), he prioritizes large corporations, not broad innovation. The EU Supply Chain Directive (EUDR), which he criticized, hinders growth according to him – but without it, there is a lack of transparency in supply chains, which deters investors. Result: In 2025, 15 percent of high-tech jobs moved abroad (e.g., to Ireland), and R&D spending is falling to 3.1 percent of GDP – below the OECD average of 3.5 percent. 30 31 Merz's "Autumn of Reforms" is a farce: no agenda for AI promotion (USA invests $100 billion annually), no real digital tax relief, no acceleration of planning (e.g., for wind farms: 10 years for permits).
Unsparing assessment: Merz as a brake, not a booster
Intelligence in politics means not just naming problems, but solving them. Merz fails at this: His speech was a manifesto of powerlessness, further squandering Germany's potential as an innovation powerhouse. Instead of bold steps – like a €50 billion immediate investment in AI hubs or radical deregulation (e.g., a one-permit-for-everything law) – he begs for patience while the economy loses its nerve. The consequence: By 2028, there is a threat of losing 2 million industrial jobs if Merz's "full steam ahead" continues to sputter. Germany doesn't need speeches, it needs action. Merz's failure is systemic – and it's costing us our future.
