Several business associations have expressed concern after the far-right AfD and the left-wing, anti-immigrant BSW scored huge gains in the state elections in Saxony and Thuringia.
Marcel Fratzscher, president of the German Institute for Economic Research, warned of significant economic and social consequences.
“The AfD in particular stands for an extremely neoliberal economic policy, for protectionism and isolation from Europe, for less immigration of skilled workers and less openness and diversity,” he told Reuters.
Fratzscher believes the election results will lead to an exodus of firms and skilled workers from both states.
The German Economic Institute (IW) also sees the results as a bad signal.
“This cannot bode well for the economy, because it needs political predictability, institutional stability and reliable framework conditions,” IW director Michael Hüther told Reuters.
Right-wing shift threatens Thuringia’s economy
Ralf Wintergerst, president of the digital association Bitkom, said the results are a “warning signal for the digital economy.”
“Germany must remain a country that stands for openness to the world and innovation,” he said, adding that neither AfD nor BSW represents these values.
Monika Schnitzer, Chair of the German Council of Economic Experts, warned that government formation will be difficult in Saxony and Thuringia, and that it “could take weeks or even months.”
She said no political decisions could be taken without a stable democratic majority.
“But that means that companies, universities, cultural institutions and citizens have no planning security,” said the economist.
“But uncertainty is toxic, especially for the economy,” she noted, pointing out that “companies will delay investment plans or abandon them altogether, with negative effects on growth.”
