Friedrich Merz has just thrown down the gauntlet – and rightly so.
His proposed €46bn corporate tax break package is the bold, unapologetically pro-business intervention that stagnant European economies desperately need.
A wake-up call for Britain?
For Britain, watching from across the Channel, it’s a wake-up call. This is what economic leadership looks like.
Merz understands a fundamental truth that far too many policymakers ignore: growth doesn’t come from tinkering at the edges. It requires decisive, headline-grabbing moves that tell investors and entrepreneurs alike – this country means business.
By cutting corporate tax rates from 15% to 10% over four years, slashing bureaucracy, incentivising investment in machinery and electric vehicles, and supercharging R&D, Merz is laying the groundwork for a German resurgence.
UK economy flatlines
For too long, the UK has muddled through with incoherent industrial strategies, paralysed by fear of upsetting political narratives. Meanwhile, the real economy flatlines. The Merz model tears up that caution. It bets on industry. It bets on innovation. It bets on Germany.
Critics will cry foul – “fiscal recklessness,” “corporate giveaways,” “a race to the bottom.” But they miss the point. Economic stagnation is more dangerous than bold fiscal stimulus. Without competitiveness, without fresh capital flowing into high-value sectors, Europe becomes a museum – beautiful, historic, but frozen in time.
Germany is already playing catch-up. Its corporate investment levels lag behind the US by 20 percentage points. R&D spending in areas like AI trails both France and America. Merz’s reforms, if passed by summer, will inject immediate stimulus while positioning the economy for long-term resilience.
An example Britain should notice
Britain should take note. We need our own Merz moment – a radical, growth-first strategy that doesn’t tiptoe around vested interests or hide behind tired orthodoxies. That means revamping our tax system, championing advanced manufacturing, and being unafraid to reward enterprise.
This isn’t about copying Germany. It’s about realising that bold, pro-business leadership still matters. If we want to turn the tide on low growth, low productivity and low ambition, the answer won’t come from focus groups. It will come from brave, visionary decisions like Merz’s.
Germany has just stepped into the arena. Britain must now decide: follow, compete – or be left behind.
