Germany risks becoming ‘developing country’, says stock exchange chief

The head of Germany’s stock exchange has claimed the nation is becoming a “developing country” and called his own market “a junk shop”.

Theodor Weimer, chief executive of Deutsche Börse, said a “lack of leadership” by Chancellor Olaf Scholz’s ruling coalition was putting international investors off investing in Germany.

In a speech to business leaders, Mr Weimer said the Eurozone’s largest economy was “economically on the way to becoming a developing country”. 

“I don’t want to spoil your evening, but one thing is clear: our reputation in the world has never been so bad,” he said.

In a 20 minute speech to the Wirtschaftsbeirat Bayern, a Bavarian business lobby group, Mr Weimer attacked the ruling coalition and the role of economics minister Robert Habeck, Mr Scholtz’s deputy.

Mr Weimer said he was initially “full of enthusiasm” but called Mr Scholtz a “sheer catastrophe” after meeting the minister 18 times, adding: “What kind of government are you actually running?”

Germany was in recession last year and is set to be the slowest growing major economy this year, according to the nation’s IFO Institute, expanding by just 0.2pc.

The country’s stock market is also suffering similar gloom to the London exchange.

Linde, the largest company on the blue chip Dax index, quit Germany last year to relist in the US, while Germany has also missed out on listings of domestic companies such as Birkenstock and BioNTech, both of which picked New York.

The Dax is trading at a record 25pc discount to the US S&P 500.

“We have become a junk shop,” Mr Weimer said of the low value of the German stock market.

Mr Weimer also took aim at the country’s migration policy, which is a key focus for Germany’s hard right party AfD.

The executive criticised the lack of skilled workers with language skills who were recruited to come and work in the country.

“Our migration policy – I don’t want to get too political – is seen by everyone as completely wrong,” he said. “Our focus on do-gooderism is not shared anywhere.”

Der Spiegel reported that AfD state politician Jurij Kofner had been at the speech and asked Mr Weimer about whether the rise of the hard right was impacting business confidence.

Mr Weimer said: “The fact that there are right-wing populists is not an issue for us professionals at the moment.”

The AfD were forecast to have picked up 16.2pc of the votes in the European elections over the weekend, the highest level for a far right party since democracy was reintroduced in Germany after the Second World War. The CDU achieved 30pc while Chancellor Scholz’s SPD got a lowly 14pc.

Mr Weimer’s speech was made in April but the controversy was ignited on Friday when the Wirtschaftsbeirat Bayern posted the video on YouTube.

His criticism has prompted a backlash from Mr Scholz’s coalition government.

Verena Hubertz, deputy leader of the Social Democrats’ parliamentary group, told the Financial Times: “The bizarre speech is more beer tent than Dax-listed company executive.”

Sandra Detzer, economic spokesman for the Greens, told the FT that bashing politicians would “damage our political culture and the prestige of the German economy”.

Germany is governed by a coalition government composed of Mr Scholz’s SPD, the Greens and the liberal FDP. It is known as the “traffic light coalition” because of the red, green and orange colour of the parties involved.

The CDU, the party which has historically dominated German politics, is in opposition. Former chancellors Angela Merkel and Helmut Kohl were both from the CDU. Wirtschaftsbeirat Bayern is aligned with the CDU.

A Deutsche Börse spokesman said: “Theodor Weimer is known for always being clear with his views. He does not gloss over problems. He has expressed his views, which are largely based on discussions with international investors, on a wide range of occasions.”

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