Germany risks falling into crisis because of government indecision over economic reform in Europe’s largest economy and increasingly loud demands from trade unions for higher pay and less flexibility, one of the country’s leading businessmen has warned.

Franz Fehrenbach, chief executive of Bosch, Europe’s largest privately-owned industrial group, told the Financial Times that the “very dangerous mixture” of electioneering by politicians, higher wage deals and a push for a minimum wage came at the worst possible time as “the risks for 2009 grow every day” for the continent’s companies.