German CEOs Caution AfD Rise Could Harm Exports

German business leaders on Monday warned that the rise of a nationalist anti-immigration party could hurt the nation's export-driven economy.

The anti-immigration Alternative for Deutschland, or AfD, won 13% of the vote, making them the third-largest political faction in parliament after Chancellor Angela Merkel's conservatives and the left-leaning Social Democrats. The AfD, which garnered little support in previous elections, benefited from a voter backlash over Ms. Merkel's open-door refugee policy that allowed more than one million refugees to enter the country in the last two years.

While business leaders called on Ms. Merkel to create a new government coalition focused on improving the conditions for doing business in Germany, including tax reform and helping Germany catch up in the digital transformation of industry and commerce, they appeared most concerned that the emergence of nationalist and protectionist politics embodied by the right-wing AfD could harm exports.

"It will change our country and test the stability of our democracy," Volkswagen AG Chief Executive Matthias Müller said in a statement, adding that he was shocked by the AfD's ability to gain seats in parliament. "In the globalized world of business, a beggar-thy-neighbor mindset and protectionism are a dead-end street -- one that ultimately means the loss of jobs."

Joe Kaeser, chief executive of Siemens AG, compared the complacency of German elites while the AfD gained popularity in recent years with the failure to stop the rise of Hitler's Nazi party in the 1930s.

"This political victory is also a defeat for Germany's elites," he said in a statement. "We have dismissed the AfD's voters as people on the fringes of society. We have again stood by and watched this happen, and that has to change."

It is rare for Germany's leading executives to comment publicly on national politics. They tend to leave that job to their respective industry associations, which are well-funded and powerful lobbying machines.

That fact that some are speaking out is a sign of how deep the shock is over the erosion of support for Germany's mainstream parties and surge in support for the nationalist AfD.

Many of Germany's largest corporations including Volkswagen, Siemens and Daimler AG were complicit with the Nazi regime and have in recent years published detailed histories of their use of slave labor.

Daimler Chief Executive Dieter Zetsche didn't comment personally, but his spokesman said the company was committed to a "liberal democratic constitutional order."

"For us, that means respecting basic and human rights, defending democratic principles as well as the rule of law, standing up for a social market economy and a unified Europe," the spokesman said in a statement.

Dieter Kempf, the president of the Federation of German Industry, or BDI, said the AfD was opposed to all the things that made Germany a strong economic power and that "Germany must remain a strong and open country."

The head of Germany's leading engineering association, the VDMA, dismissed the AfD's anti-European stance and said "free markets and open societies create prosperity and jobs. No one has ever advanced by retreating to his own homeland."

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

September 25, 2017 13:15 ET (17:15 GMT)