Bundestag elec­tion 2025: "Ideo­logy is not a good ad­visor"

 |  Economy & BusinessTransferPress releaseFaculty of Business Administration and Economics

Early federal elections will be held in Germany on 23 February. The key election issue: the economic crisis. In 2024, Germany's gross domestic product (GDP) shrank for the second year in a row - the last time this happened was in 2002/03. Experts from the Faculty of Business Administration and Economics at Paderborn University categorise the current situation and points of contention from an academic perspective. Their expertise is based on a wide range of research activities: In the Collaborative Research Centre (SFB) "Accounting for Transparency" led by Paderborn University - the first SFB in Germany with a focus on business administration - researchers are investigating, for example, how tax regulation influences the transparency of companies. The research is intended to contribute to the development of sensible rules for corporate transparency and a more transparent tax system. The faculty also recently achieved a top position in the DFG's Germany-wide funding atlas. With thePaderborn Research Centre for Sustainable Economy(PARSEC), it has structurally expanded its teaching and research activities on sustainability. The team understands "sustainable economy" as long-term orientated economic development with special consideration of social, environmental and cultural aspects.

Mr Müller, the financing of health insurance funds is to be subsidised with the help of capital income subject to social insurance contributions - at least that is one proposal. Apart from private savings, which are generally already taxed: What would this mean for companies and the economy?

Prof Dr Jens Müller: "Companies are hardly affected by the reform proposal, only their shareholders. If you take into account allowances for low capital income and contribution assessment limits, there would probably only be a small amount of revenue to finance the health insurance funds. It would be easier to increase taxes if you want to place a greater burden on capital income for financing social insurance. In my view, however, it is crucial to tackle the fundamental problems of social insurance and at the same time improve the efficiency of the healthcare system."

The high energy prices for companies are also one of the major points of contention. How can a constant supply of electricity be guaranteed without having to pay record prices for wind or solar power, for example? To what extent can EU emissions trading be an effective instrument for companies?

Prof Dr Martin Kesternich: "First of all, it's worth taking a look at the latest developments. Electricity prices have recently fallen significantly for small to medium-sized industrial companies, for example. According to the BDEW electricity price analysis, the average electricity price for these companies in 2024 was around 17 ct/kWh, almost 8 ct/kWh below the prices in 2023. Nevertheless, electricity prices remain at a high level. The necessary expansion of the generation and grid infrastructure as well as the integration of renewable energies into the electricity grid will require high investments. In the long term, however, these investments will contribute to lower electricity prices and accelerate electrification. On the demand side, current forecasts assume that less electricity will be purchased over the next five years than previously assumed. Even if the expected price paths for electricity in the coming years are therefore subject to a certain degree of uncertainty, it is becoming apparent that the volatility in electricity generation will lead to significant price fluctuations. From an economic perspective, it is therefore crucial to exploit flexibilisation options even more than before and to open up new business models through appropriate economic incentives.

Further incentives for investments in low-emission technologies are provided by the EU Emissions Trading Scheme (EU ETS), which covers the energy generation and electri