FRANKFURT (Reuters) - German industry, reeling from high costs and fierce Asian competition, urged Berlin on Thursday to hold snap elections as soon as possible after the ruling coalition broke up, warning Europe's top economy had no time to waste to get back on track.
The comments from the automotive, chemicals and energy sectors, which together form Germany's industrial backbone, highlight the need for fast reform as German companies are increasingly falling behind international competitors.
On Wednesday evening, German Chancellor Olaf Scholz fired Finance Minister Christian Lindner after weeks of deadlock over budgets and other policy, dissolving the three-way "traffic light" coalition consisting of the Social Democrats (SPD), environmentalist Greens and neo-liberal Free Democrats (FDP).
The move has thrown Europe's economic powerhouse into a leadership vacuum at a time of industrial weakness.
Scholz said he was planning to hold a vote of confidence in January, paving the way for elections in March, a timeline key industry representatives said raised the risk of prolonged uncertainty when the sector needs regulatory support.
"The end of the traffic light coalition comes at a bad time," said Wolfgang Grosse Entrup, who heads Germany's pharma and chemicals lobby group VCI, representing companies such as BASF, Covestro and Evonik.
"Especially in these challenging times, we need a solution-oriented federal government capable of taking action ... We cannot afford a months-long standstill and political deadlock."
The comments chimed with those of Hildegard Mueller, president of the powerful car lobby group VDA, which speaks on behalf of Germany's major automakers Volkswagen, Porsche, Mercedes-Benz and BMW.
Mueller, a former energy executive, said "new elections must be held as soon as possible. Germany cannot afford any further standstill in this situation".
The situation in the car industry is particularly dire, with all automakers suffering under growing global trade tensions, particularly between top markets U.S. and China, while Asian rivals are entering the European market with cheaper products.
German exports and industrial output fell more than expected in September, underlining the weakness of two of the pillars of Germany's economic model at the start of the fourth quarter.
Volkswagen CEO Oliver Blume, currently locked in a major dispute with unions over potential pay cuts and plant closures, met with Scholz last week as part of an exchange with industry over how to support the troubled sector.
Scholz said on Wednesday he was planning a draft law on immediate support measures for the industrial sector before Christmas, raising the question how he intends to do that without a majority in parliament.
(Reporting by Christoph Steitz; editing by Matthias Williams and Mark Heinrich)
By Christoph Steitz