Employers' Boss Blasts Merkel's Reform Slowdown

In a speech written for a conference in Bavaria, Dieter Hundt, head of the BDA employers' federation, suggested the coalition between Merkel's Christian Democrats (CDU) and the Social Democrats had its eye on next year's general election and "counts more on spreading early election largesse than on structural reforms and investing in the future."

Among other things, Hundt criticized the decision to boost the retirement pensions by 1.1 percent -- more than what is legally required -- for 20 million Germans beginning July 1.

Disappointment with a pro-business chancellor

These recent decisions had been detrimental to job creation and dangerous to the welfare system, according to Hundt.

One thing Hundt suggested would be more beneficial to workers was to cut the mandatory unemployment insurance levies on pay by 0.5 percent. This, he said, would simultaneously encourage companies to employ more people.

His sharp criticism of the government comes amid growing impatience among German businesses about Merkel, who at her election in 2005 was seen as committed to pro-business reforms to the country's economic system.