Germany's corporations and government are launching initiatives to boost investor confidence and address underinvestment. Over 30 of Germany's largest companies, including Siemens and Deutsche Bank, have committed approximately $352 billion in investments within Germany until 2028. This figure could change and largely covers existing commitments, but the hope is to attract additional private capital. Another group of 61 companies plans to invest $737.4 billion by 2028.
The German government has also made infrastructure investment a priority, establishing a $564 billion infrastructure and climate special investment fund. Economy Minister Katherina Reiche emphasized the need for private capital, stating that 90% of investments should come from the private sector. This follows a long period of underinvestment, resulting in issues like crumbling bridges and outdated train tracks. For example, Deutsche Bahn needs an estimated $150 billion by 2034 to modernize its network, and a broader report suggests $600 billion is needed over 10 years for infrastructure improvements.
While there's a perceived alliance between the corporate world and politics, businesses are pressing the government to move beyond promises and implement structural reforms. CEOs like Roland Busch of Siemens are calling for digitalization, faster decision processes, reduced bureaucracy, energy transformation, and labor market changes. Some economists surveyed by Ifo and Frankfurter Allgemeine Zeitung rated the government's economic policy measures as "rather negative" (30%) or "very negative" (12%). There is also a push from German Pensionskassen to clarify reforms and allow greater risk-taking in private markets.
Investor interest in German infrastructure is growing, with Deutsche Bank's chief German economist, Robin Winkler, noting that recent political moves could trigger a wave of private sector investment. Berlin is also planning to cut red tape to incentivize private investment, addressing concerns that infrastructure projects have been hindered by excessive bureaucratic hurdles. However, questions remain about the speed of project approval processes and whether there's enough capacity to develop projects within compressed timeframes.
