BERLIN German Chancellor Olaf Scholz on Wednesday called on the ruling coalition and democratic opposition to pull together to overcome the "mildew of red tape, risk averseness and despondency" that has weighed down Europe's largest economy in recent years.

This was also key, he said, to fend off "those who want to draw political profit from decline scenarios and panic-mongering" amid a sharp rise in support for Germany's far-right.

"The citizens are fed up with this standstill, and I am too," Scholz said in a speech to the Bundestag lower house of parliament during a session on the 2024 budget, sporting a black eye patch following a jogging accident.

The chancellor announced a new "Germany pact" with a bundle of measures aimed at streamlining the country's notoriously slow bureaucracy and speeding up the digitalization of the economy.

(Reporting by Sarah Marsh; Editing by Miranda Murray)