"An aggressive 'friend or foe' stance has been adopted"
In recent news, there have been signs of a positive shift in the German economy, with businesses, investors, and consumers showing improved sentiments. This optimistic outlook comes after the federal election, with the government reportedly rejoicing at the improved economic mood.
The German economy's improved business climate is evident in the ifo Business Climate Index, which reached 88.4 points in June 2025, its highest level since May 2024[1][5]. This ongoing improvement suggests that businesses in Germany have been feeling increasingly positive.
Investor confidence has also seen a rise, with the ZEW Index unexpectedly increasing to 52.7 in July[3]. This optimistic outlook among investors could be due to several factors, including government policies and expectations of resolving trade disputes.
While consumer sentiment has improved, it is somewhat mixed. Consumers are optimistic about the economy but have a more pessimistic view of their income situation, which could dampen spending momentum[4]. However, this does not necessarily indicate a decline in overall economic mood.
Michael Hüther, the head of the Institute of the German Economy (IW), has been vocal about the growing polarization in the economic debate in Germany[2][6][7]. He has criticized the growing polarization and advocated for less ideology in discussions about reform options, implying a need for a less polarized approach in the economic debate[6][7].
However, Hüther did not explicitly confirm or deny the improvement in the mood of the German economy since the federal election. The available data does not provide a direct quote or statement from Hüther regarding this improvement.
It is worth noting that some websites, such as NZZ.ch, require JavaScript for their important functions[8]. Users are advised to adjust their browser settings to enable JavaScript to ensure the website's functionality.
In conclusion, while the direct impact of the federal election on the improving trends in the German economy is not explicitly mentioned in the available data, there is evidence of an improving mood across various indicators like business climate, investor confidence, and consumer sentiment. The need for a less polarized approach in the economic debate, as advocated by Michael Hüther, could contribute to a more sustainable and positive economic outlook in the future.
[1] ifo Institute (2025). ifo Business Climate Index. Retrieved from https://www.ifo.de/en/news-and-events/ifo-business-climate-index [2] Handelsblatt (2025). Michael Hüther: Die Wirtschaftspolitik muss weniger polarisiert sein. Retrieved from https://www.handelsblatt.com/politik/deutschland/michael-huther-die-wirtschaftspolitik-muessen-weniger-polarisiert-sein-42939894 [3] ZEW (2025). ZEW Indicator of Economic Sentiment. Retrieved from https://www.zew.de/en/research/indicators/zew-indicator-of-economic-sentiment [4] Destatis (2025). Consumer sentiment in Germany. Retrieved from https://www.destatis.de/EN/Themes/EconomyAndTransport/PriceStatistics/ConsumerPriceIndex/ConsumerSentiment/ConsumerSentiment.html [5] ifo Institute (2025). ifo Business Climate Index June 2025. Retrieved from https://www.ifo.de/en/news-and-events/ifo-business-climate-index-june-2025 [6] Handelsblatt (2025). Michael Hüther: Wir brauchen weniger Ideologie in der Wirtschaftspolitik. Retrieved from https://www.handelsblatt.com/politik/deutschland/michael-huther-wir-brauchen-weniger-ideologie-in-der-wirtschaftspolitik-42927814 [7] NZZ (2025). Michael Hüther fordert eine ausgewogene Wirtschaftspolitik. Retrieved from https://www.nzz.ch/schweiz/michael-huther-fordert-eine-ausgewogene-wirtschaftspolitik-ld.1519062 [8] NZZ.ch (2025). JavaScript required. Retrieved from https://www.nzz.ch/en/javascript-required-1.16216868
Economic and social policy discussions in Germany are vital, with Michael Hüther, the head of the Institute of the German Economy (IW), emphasizing the need for less polarization and more pragmatic approaches [2][6][7]. This less polarized approach could contribute to a more sustainable and positive economic outlook in the future, aligning with the current optimistic mood seen in the economy, as indicated by the improving business climate, investor confidence, and consumer sentiment [1][3][4]. However, the direct impact of the recent federal election on these improving trends is not explicitly mentioned in the available data.
