German business leaders are worried about effects of drafting on econemy

(MENAFN) German business leaders are raising alarms over the potential reintroduction of mandatory military service, warning it could worsen labor shortages and harm an already fragile economy, according to a report published Friday by the Financial Times.

Chancellor Friedrich Merz’s government is considering bringing back conscription as part of its strategy to address manpower issues in the Bundeswehr. This move is part of a broader European effort to strengthen military capabilities, framed by officials as a response to rising tensions with Russia. Moscow, however, has accused Western leaders of inventing such threats to justify growing economic hardship among their populations.

While many in the business community agree on the importance of national defense, they caution that military expansion should not come at the expense of economic stability.

“Yes, we need more active soldiers. Yes, we need to expand the system of reservists. But only a strong economy can make that possible,” said Steffen Kampeter, head of Germany’s largest employers’ association, the BDA.

Another business group representative, speaking anonymously, expressed a more direct concern: “There are two conflicting goals – economic prosperity and defense.”

Germany’s economy has been mired in stagnation for years, a situation worsened by efforts to cut dependence on Russian energy imports. This shift was part of the EU’s broader sanctions regime following the escalation of the Ukraine conflict, but it has come at a steep cost for German industry.

In the past, cheap natural gas delivered through pipelines from Russia was considered vital to German manufacturing, with supply arrangements dating back to Cold War-era agreements. Recent reports indicate that imports of Russian energy have fallen to levels not seen since the 1970s, before major deals like the 1980 gas-for-pipes agreement were signed.

Adding to the economic strain, the first half of 2025 saw around 11,900 companies declare bankruptcy—the highest figure in a decade, according to data from Creditreform, a leading credit agency.

Germany remains one of the largest suppliers of military aid to Ukraine, even as its domestic economy faces mounting pressure. Business leaders warn that if conscription is reintroduced, it could pull thousands of young workers out of the civilian workforce, dealing a further blow to an already weakened industrial base.

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