German coalition, in question amid SPD crisis, must regain trust fast: BDI

BERLIN (Reuters) - Chancellor Angela Merkel's fractious ruling coalition must get its act together and win back trust quickly, the head of Germany's BDI industry lobby said on Tuesday after Merkel's coalition partner was plunged into crisis as its leader quit.

“The government has lost a lot of trust,” BDI President Dieter Kempf said, pointing to the heavy losses suffered by Merkel's conservatives and the co-governing Social Democrats (SPD) in last month's European elections.

“There needs to be serious and responsible leadership,” Kempf said at a conference in Berlin, according to the text of his speech. “In light of the growing challenges for the world economy and growth, Europe needs a Germany capable of acting, with a decisive government.”

The SPD appointed three caretakers on Monday to run the party after leader Andrea Nahles resigned and SPD members, appalled by their poor showing in elections, called for the end of their loveless coalition with Merkel.

Turning to the growth outlook, Kempf said the BDI expected the German economy to grow by roughly 1% this year but warned that if Britain quit the European Union without a deal, there would be a high risk of recession next year.

Kempf urged the United States and the European Union to reach an agreement soon to lower trade barriers instead of sliding into a trade dispute of tit-for-tat tariffs.