The German Mittelstand association has issued sharp criticism of Chancellor Friedrich Merz, citing weak leadership and poor communication within his coalition government. A letter has also been sent to senior ministers calling for urgent reforms to support small and medium-sized enterprises.

The Federation of German Small and Medium-Sized Enterprises (BVMW) has raised serious concerns about the leadership of Chancellor Friedrich Merz, urging him to take decisive action to guide his coalition government. Christoph Ahlhaus, the association’s managing director, argued that ongoing delays and infighting over key reforms, including retirement policies and healthcare, have eroded public and business confidence. Ahlhaus stressed that without a clear demonstration of authority from Merz, the government risks fragmentation.

Ahlhaus also criticized the coalition’s communication strategy, describing it as chaotic and damaging. He pointed to public disagreements about the proposed pension reforms as a case of uncoordinated policymaking, which he said highlights a lack of a unified vision. Ahlhaus further called on the chancellor to quash discussions around raising the value-added tax, which he argued would harm businesses already grappling with economic challenges.

In a separate urgent letter addressed to Finance Minister Lars Klingbeil and Economy Minister Katherina Reiche, the Mittelstand association demanded the immediate lifting of a funding freeze on the Central Innovation Program for SMEs (ZIM). The letter warned that the suspension of this critical R&D funding, which began in July, is hindering innovation and forcing companies to shelve or abandon projects. The BVMW urged the government to signal decisive action by reopening the program during upcoming cabinet talks in Brandenburg to avoid stalling Germany’s economic growth.