FRANKFURT, April 22 (Xinhua) -- The representative organization of Germany's mechanical and plant engineering industry called for bolder reforms to enhance the industry's competitiveness as Germany faces increasing competition for investment from other countries.

"New investment projects are mainly taking place abroad, for example, in the United States. If we do nothing to counteract this, it will further weaken our economy," said Karl Haeusgen, president of VDMA, the mechanical and plant engineering industry advocacy body, during his speech at the opening of the Hannover Messe.

According to a press release from VDMA on Monday, machinery and equipment production in Germany fell by 4.2 percent in the first two months, and incoming orders dropped by 10 percent over the same period last year.

Haeusgen expects mechanical and plant engineering production to fall by four percent in gross domestic product (GDP) in 2024 as "the economic and political environment is more challenging than ever."

The German industry representative warned against the growing populism in Germany and the European Union (EU). He argued that it would give rise to isolationism instead of open borders and free trade, which are the foundations of Europe's success model.

Haeusgen considers the Growth Opportunities Act, which was approved by the upper house of the German Parliament in March, a good starting point and urged the EU and German governments to make bold reforms.

The Growth Opportunities Act, proposed to "stimulate growth," was introduced at a federal cabinet meeting in August 2023. The act "is a vital building block for fully tapping our economy's turnaround potential," said German Finance Minister Christian Lindner.

According to the Act, Germany will provide annual economic relief of approximately 7 billion euros (7.45 billion U.S. dollars) until 2028.

Haeusgen called for deregulation, reduced bureaucracy, and international corporate taxes, among other measures to boost investment in Germany.

A report published by the economic think tank Ifo Institute in April showed that German companies are set to cut investment in 2024. Lara Zarges, an Ifo economic expert, said that many German companies are postponing their investment decisions due to the rising global demand for capital and intermediate goods.

A survey conducted by the institute indicates that the investment reduction intention was most pronounced in Germany's manufacturing industry, with investment expectations there falling from 6.6 points in November to 1.4 points in March.

The historically high-interest rates in the euro area keep borrowing costs high and reduce corporate willingness to borrow. "Germany's economy continues to experience headwinds from various directions," Bundesbank, Germany's central bank, stated in a March press release following preliminary data indicating a decline in the GDP in the first quarter of this year. Enditem

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