Economics always has an element of psychology. If companies are convinced that they can do good business in the future, they will invest firmly. If the possibilities look bad, they will catch the money.
The Covid-19 epidemic with its collapse of international supply chains, war in Ukraine, later energy crisis and inflation, weak economy in China took heavy toll over the export-oriented German economy.
Economic activity nosed. Germany slipped into a loading recession. Since then, optimism has not returned. The Economic Cooperation and Development Organization (OECD) recorded a lower investment ratio for Germany in 2024 compared to all other 38 members of the member countries.
631 billion euro investment plan
According to the heads of the leading companies in Germany, it will soon change. A total of 61 of them, including the corporations, discovered as Airbus, BASF, BMW, Deutush Bores, Mercedes-Benz, Rhinmetal, SAP, Volkswagen, but therefore American corporations made Nvidia, Blackrock and Blackstone-Have “created for Germany.
This name is remembered, intentionally, “built in Germany” is of the slogan that has become a symbol of quality.
Together, the corporations representing one third of the German economy want to invest € 631 billion ($ 733 billion) in Germany over the next three years. The money will go to new and existing factories, as well as research and development. “We want economic growth, we want to strengthen Germany’s competitiveness, we want to protect our technical leadership or expand it,” one of the two surgers of the coalition, Siemens Chief Executive Officer, Rolland Busch said that after a meeting of the initiative, the politician of the politician of Vonhawasi’s politicians in Chancellor,
Christian sewing, Dutush bank’s chief executive officer and co-integral of alliance with Busch, expects to join more businesses.
“Germany is back. It is worth investing again in Germany,” said Frederick Merz, Chancellor of Conservative Christian Democrats (CDU) after the meeting. “We are standing here before one of the biggest investment initiatives seen here in Germany in recent decades. We are not a place of the past, but above the present place and all of the future,” Hey said.
Where does the new optimism come from?
The mood in Chancellori was clearly positive. However, the economic situation in Germany remains dull; The country is facing its third year without continuous development. Given the tariff policies of US President Donald Trump, the approach is anything but good.
Revival of the economy is the top priority for the new government of Germany. The alliance of Center-Halid Christian Democrats and Christian Social Union (CDU/CSU) and Center-Life Social Democrats has been in office since early May.
He has taken his first step: Bundestag Federat Upper House authorized a loan of € 500 billion ($ 580 billion) for a special fund for government investment in infrastructure and climate protection. Its intended attention is to shape the sick transport routes of the country, to invest in energy networks, digitization and research.
Energy prices for the industry will decrease, and businesses are prescribed for mass tax relief. Initly, will be responsible during assessment by investing in production facilities, machinery, equipment, research and development. In the moderate period, taxes on business have to be reduced.
A new intimacy between politics and business
In Frederick Merz, Germany now has a Chancellor, who spent many years of business in business. In other roles, the lawyer previously presided over the supervisory board of US financial investor Blackrock.
“Today we have started a new form of cooperation,” said Siemens Head Bush. “The conversation has shown that politics and business are on the same page.” Dutash Bank’s CEO Sewi said: “In my view, we are experiencing a government that is moving quickly. Most importing things – development and competition – are correct at the top of the agenda.”
To release the declared Arabs, politicians should be ease on the rules and give more freedom to companies, stitching.
Calling businesses for reforms, especially related to bureaucracy and social security contribution that increases the cost of the laboratory. In Germany, employers and employees pay half of each worker contribution in health insurance, unemployment insurance and pension. Due to the high cost for healthcare, the health insurance contribution in the board earlier this year increased. The contribution to long -term care insurance in 2026 is expected to increase.
Old age pension, unemployment- UN health insurance burden
In Germany, 42% of the gross national product leads to social services. Pension funds are the biggest drivers of this. Germany is an aging society, and Baby Boomer generation will retire from the workforce in the coming years. In addition, life expectancy is increasing. To bear the cost of old age pension, the government should contribute more money to pension funds every year.
According to OECD, improvement in social insurance is the biggest challenge for Germany. If nothing, the government will need to take more loans to preserve social systems.
Chancellor Frederick Merz has announced that the improvement in social system is in the political agenda of his alliance. Preliminary conclusions are expected in the coming months.
This article was original in German.
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