German CEOs warn over political stability ahead of elections

Monday, 26 Aug 2013 | 2:44 AM ET
German politicians must maintain stability: Infineon CEO
Monday, 26 Aug 2013 | 1:12 AM ET
Reinhard Ploss, CEO of Infineon, talks to CNBC about Germany's political situation and the upcoming elections.

German business leaders have warned that the country's next government must maintain political stability and strive to remain competitive, as pressure mounts on Chancellor Angela Merkel ahead of elections on September 22.

The comments come as the controversial issue of Greece resurfaced with a vengeance this weekend, after Merkel insisted the country would not need a debt write down. The topic – which is hugely unpopular with German voters – could be having an impact on Merkel's campaign for a third term in office after a poll released on Sunday showed that her center-right coalition had lost its slight lead over parties on the left.

The CEO of German semiconductor manufacturer Infineon, Reinhard Ploss, said political stability was crucial for the country, looking ahead.

"The politicians are very well aware of the role they have to play in making sure we have a certain stability overall and we have seen how much this value of stability is, and my expectation of any party coming in to [power] is that they consider this," he told CNBC in Munich.

(Read more: Greece returns as hot-button issue in German election)

Ploss added that the country's next leader should also consider the country's competitiveness in a global economy, "to ensure there is a future for Germany and a good life in this country."

The chief executive of German cable supplier Leoni agreed, adding that the country's next government must keep up with labor market reform to ensure it remained competitive in a global marketplace.

"There's a lot of things to be done, to prepare ourselves and our competitiveness in the future… one of my wishes for the future [is that the government improves] the legal requirement which helps make hiring people or even getting rid of people [more flexible]," Klaus Probst said.

(Read more: German elections are a 'close call': Merkel)

However, domestic matters appear to have taken a back seat for German voters, being overshadowed by concerns about the euro zone – and Greece in particular. Many Germans resent their contribution to two Greek bailouts worth 240 billion euros ($321.1 billion), and Merkel has tried to avoided mentioning the issue during her election campaign.

Leoni CEO: Good agreements with unions keep us competitive
Klaus Probst, CEO of Leoni, tells CNBC how good agreements with German unions have helped the country become more competitive.

On Sunday, however, she warned against a Greek debt haircut, telling Germany's Focus magazine: "It could trigger a domino effect of uncertainty with the result that the readiness of private investors to invest in the euro zone again falls to nothing." She did appear, however, to leave the door open to Greece getting more financial aid, saying the issue would be discussed in 2014.

The comments came as Greek finance minister Yannis Stournaras told newspaper Proto Thema on Sunday that his country could need a further 10 billion euros to plug a funding gap.

(Read more: Greece faces September funding gap: Report)

One strategist, however, told CNBC he believed the required amount was much more.

"Germany is trying to push this issue down past the German election but I don't think the government will be able to postpone this discussion until next year," Marius Daheim, senior Fixed Income strategist at Bayerische Landesban, said on Monday.

"We will see some kind of a bailout and the ten billion [euro] budget gap for 2014-2015 is only the start. We will have to discuss debt sustainability and then some sort of maturity extension or, if it comes to the worst, hard debt relief."

- By CNBc's Holly Ellyatt, follow her on Twitter @HollyEllyatt

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