Banks: setting the courseFrom Frankfurt’s perspective, 2025 is dominated by one question: What will happen to Commerzbank? It is expected that the Dax group will fall into Italian hands and will be controlled from Unicredit’s headquarters in Milan. With a view to the financial center and the local economy, it is to be hoped that the traditional bank based on Kaiserplatz can fend off the takeover attempt and that politicians will also work to ensure that Commerzbank remains independent. A successful takeover could cost numerous jobs in Frankfurt and would result in The result is that an important financier, especially for German medium-sized businesses, will be lost. In addition, in view of the crisis in which German industry is currently finding itself, the banking industry, which is important for the region, must, above all, cleverly manage the risks that they have on their books and that are coming their way – and at the same time deal with them. that interest rates, which have recently brought in fine margins for private banks, will fall again. Crises, consolidation, regulation, digitalization: The year will be challenging for the industry, not just for Commerzbank. Labor market: More flexibilityThe tense economic situation is reflected in the labor market: Unemployment is increasing and fewer and fewer vacancies are being reported. At the same time, many companies suffer from a lack of qualified staff. A dilemma because employees with specific knowledge are usually sought but cannot be found among the job seekers. The majority of those who do not have a job have no qualifications at all, or at least none of the qualifications they are looking for. Here it is important for employment agencies and job centers to show candidates paths with prospects that will get them into regular work in as short a time as possible. Companies that suffer from a staff shortage should also give a chance to applicants who don’t fit the mold at first glance, as long as there are no regulations to the contrary, such as in nursing or childcare. Above all, however, those receiving unemployment or citizens’ benefits need the flexibility to also consider jobs that seem less attractive to them so that they are no longer left to burden the general public. Trade: Clear conditions Even if the Christmas business went well, the situation remains challenging for retailers in Hesse. Consumer sentiment was not good last year, and retailers also complained about too many bureaucratic requirements and high costs. Last but not least, two Chinese low-cost platforms, Temu and Shein, have entered the market that care little about local standards and regulations and have already cut off a large piece of the shrinking pie. Retailers rightly demand fair competitive conditions, just as the industry does wants more predictability and reliability again. It is hoped that the federal election could send a signal if the situation is clear. Because trade and consumption also have a large psychological component. When the economy grows, confidence increases and shopping becomes more fun again. Digital economy: Ambitious goalsHesse has ambitious goals in digitalization, but faces challenges. Administrative digitalization, for example, is making slow progress; state authorities should set a better example and thus become more efficient. In addition, the country and region must better coordinate and intensify their efforts to become pioneers in the field of artificial intelligence (AI). The current structure of an AI ecosystem is not very visible; without clear marketing and a uniform communication strategy, the great potential threatens to remain unused. While venture capital is urgently needed for digital start-ups, there is a lack of a clear strategy to attract investors sustainably to draw the region. There is a risk that Hesse will lose out in competition with other locations. It is also important to provide the growing data center industry with reliable framework conditions for space and power supply and to accelerate approval processes. Automotive: Smaller cars German car manufacturers are having difficulties. At the Volkswagen plant in Baunatal, employees are worried about their jobs, and at Opel in Rüsselsheim, jobs have been being cut for years. Some manufacturers, including VW, are also threatened with fines in 2025 because the CO₂ emissions of their new car fleets are likely to exceed the limits set by the EU. This is due to the fact that car manufacturers are currently selling fewer electric cars than expected. With the abrupt abolition of the purchase bonus for electric cars a year ago, politicians put a stop to the industry’s plans. The charging infrastructure also leaves a lot to be desired, especially for residents of apartment buildings who cannot charge up at home. But the industry also has itself to blame for the misery: its electric cars are simply too expensive for mass business. Example VW: There hasn’t been an E-Golf for years, and the even smaller E-Up has also been discontinued. In the case of combustion engines, the development of more economical engines was partly counteracted by the fact that ever larger vehicles were being built. More people could afford smaller electric cars, and smaller combustion engines would emit fewer greenhouse gases. Agriculture: perspective neededThere are farmers who proudly claim that their protests at the beginning of 2024 brought about the end of the traffic light government. They responded to the abolition of subsidies for agricultural diesel by shouting “The traffic lights must go” and blocked roads in many places with tractors. The higher cost of fuel was just the last straw. Farmers have long been suffering under the pressure of regulations that the state, federal government and EU make life and business more difficult for them. Goals such as climate, water and animal protection are also important to many farmers. But they complain about the all-too-frequent changes to laws and regulations, which mean that they are only allowed to use parts of their land to a limited extent and have to renew stables before they are even paid off. In addition, swine fever and bluetongue disease make animal husbandry more difficult, and animal foods in particular from countries with lower standards – such as the Mercosur agreement – are tough competition. If more and more farmers give up their farms, even more imports will be necessary, which harms the climate and nature and animals end up more and creates dependency. It is therefore important to create planning security for farmers and to offer them a perspective. Air traffic: In turbulence Even the prime ministers of the federal states have now made it their demand: the air traffic tax must be canceled or fundamentally changed because it and other legally fixed location costs are making it increasingly difficult for the German aviation industry to survive in international competition. How delicate the situation is can be seen from the fact that even the largest German air traffic hub, Frankfurt Airport, has not yet reached the level of 2019 in terms of traffic volume. Federal politicians have become aware of the dramatic situation has not yet been implemented in the industry, or at least has not yet led to corresponding legal changes. Rather, the current federal government has almost completely reduced funding for climate-friendly kerosene (e-fuels) for budget reasons. Without this e-fuel, professional and climate-friendly aviation is hardly possible in the long term. Whatever the outcome of the federal election in February, something must change in this matter as quickly as possible. Blending quotas for climate-friendly kerosene are only justifiable if, firstly, the required quantities can actually be obtained and, secondly, the same rules set at the destination also apply to non-European airline competition. Start-ups: Lots of courageNew year, new opportunities, new ideas. This is how founders and those who want to become founders should approach the year 2025. Of course, the economic situation is anything but rosy. Nevertheless, it remains to be said: just be brave! There is no shortage of ideas and founders, not even in Hesse. What is missing is the necessary capital that young companies need to grow. Although the number one financial center in Germany, the region lacks investors who are willing to invest money in strong innovations and willing teams in the hope that it could at least become a successful company or perhaps even the next unicorn. The region is large and financially strong, but it must better coordinate and bundle its efforts to become one of the most important start-up regions in the country. The true strength of an Innovation Hub is not only shown in the number of ideas, but above all in the ability to connect these ideas with the right resources and thus pave the way for sustainable success. –State politics: More freedom On many economic policy issues, the state government does not have the reins of action. But in those areas in which Wiesbaden can improve the situation of regional companies, more must come than before, because Hesse will also feel the structural crises that are causing problems for the entire German economy. The state government must therefore reduce bureaucratic hurdles more quickly than before, for example in building law. In addition, more affordable housing should urgently be created, especially in metropolitan areas. Economics Minister Kaweh Mansoori (SPD) has shaken many hands since he took office, but there is currently little evidence of economic policy success. More on the topic Hessian industry needs lower energy costs, the airport needs better location conditions, and Hesse needs a good idea on how to deal with the transformation of the economy because otherwise the region will continue to lose ground compared to locations, especially overseas. But above all, the economy needs more freedom and personal responsibility, more practical solutions and more reliability in terms of long-term framework conditions. –Chemistry and pharmaceuticals: new energyAfter two years of shrinkage, production in the chemical-pharmaceutical industry in Germany rose by two percent in 2024. However, this is far from compensating for the decline since 2022. The rise in energy prices after the Russian attack on Ukraine hit producers of chemical raw materials hard. Prices have now returned to normal, but at a higher level than before the war. In addition, the change in production processes is driving up the demand for electricity. Relief can only be expected when the network is expanded and more storage for wind and solar energy is available – it will take years until then. This dry spell threatens to overwhelm energy-intensive companies, of which there are several in the chemical industry. Not everything has to be produced in Germany, but given the geopolitical situation, it seems negligent to only source raw materials that are needed for almost all other industrial sectors from Asia. Higher government subsidies for network expansion would make sense in order to reduce energy costs.
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