European Diversified Chemicals: German Coalition Sets Out Competitiveness Reforms - and Signals Stronger Trade Defence

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European Diversified Chemicals: German Coalition Sets Out Competitiveness Reforms - and Signals Stronger Trade Defence

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03 Jul 2026 10:49:25 ET │ 9 pages

European Diversified Chemicals

German Coalition Sets Out Competitiveness Reforms - and Signals

Stronger Trade Defence

CITI'S TAKE

The German government yesterday unveiled a broad package of reforms

aimed at improving the country's growth prospects. The German chemical

association VCI welcomed the package as an important step toward Sebastian Satz, CFAAC

restoring competitiveness. Alongside the pension reform announced last +44-203-569-3662

week, the 34-point program includes targeted tax relief for households, sebastian.satz@citi.com

labour-market reforms, measures to curb welfare abuse, housing Ranulf Orr, CFA

initiatives and, importantly, a push to reduce bureaucracy. Excessive +44-20-7986-3922

regulation is consistently cited as a major challenge by German ranulf.orr@citi.com

corporates. The chemical industry was referenced twice in the document,

underscoring its strategic importance. Trade policy also features Omi Pallavi

prominently, with the government pledging stronger support for EU anti- +44-20-7508-1367

omi.pallavi@citi.com dumping and anti-subsidy instruments. In our view, this highlights the

growing willingness to defend key industrial sectors, including chemicals.

We have recently discussed the theme of rising European protectionism,

which remains underappreciated by many chemical investors. (EU

Diversified Chemicals - From supply distortions to protection?)

It remains to be seen what impact these reforms will ultimately have on the

broader economy and the chemical industry in particular. While the pension reform

is expected to pass parliament before the summer recess, the broader package still