May 9, 2025, Bavaria, Gmund Am Tegernsee: Katherina Reiche (CDU), Federal Minister of Economic Affairs and Energy, participates in the summit of Ludwig Erhard. Business, politics, science and media representatives participate in the three -day summit. Photo: Sven Hoppe/DPA (photo of Sven Hoppe/Picture Alliance through Getty Images)
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Germany needs to run more risks and boost its stagnant economy with a decade of investment in infrastructure, the German Minister of Economic Affairs and Energy Katherina Reiche said Friday.
“The next decade will be the decade of investments in infrastructure in bridges, in energy infrastructure, storage, in maritime infrastructure … Telecommunications. And for this, we need speed. We need speed and investments, and we need private capital,” Reiche told Annette Weisbach of CNBC in the secondary part of the Sigresee Summmit.
While 10% of investments could be served with public money, the remaining 90% depended on the private sector, he said.
The newly coined Minister of Economy also addressed the regulation from Brussels, warning that it could prevent investment and new companies from growing if it is too restrictive. Germany has had to know that investments come with risks “and we have to be open to assume more risks,” he said.
Starting regulatory changes will be in fact one of the most important works for the new German government, Veronika Grimm, a member of the German Council of Economic Experts, told CNB out of the Summit of Tegernsee.
“It will be important to adjust the regulation, so eliminating or changing the regulation of innovation so that it is more possible in many areas of technology,” he said in the comments translated by CNBC.
“And then, of course, it is about improving the environment or companies, making it more attractive to be competitive again,” Grimm said.
On the edge of the recession
The economy of Germany contracted slightly annually in both 2023 and 2024 and the quarterly gross domestic product has been turning between growth and contraction for more than two years, almost managing to avoid a technical recession. Preliminary data for the first quarter of 2025 showed an expansion of 0.2%.
The forecasts do not suggest much of a slow respite, with the now former German government last month saying that he still hopes that the economy will stan this year.
“This country needs an economic change. After two years of recessions, the previous government had to announce again [a] Zero year of growth by 2025 and we really have to work on this. Then, at the top of the agenda there is an investor reinforcement, “said Economy Minister, Reiche.
Reduce energy prices, stabilize energy supply security and reduce bureaucracy were among the key points of the agenda, he added.
This despite an important prosecutor announced at the beginning of this year, which included changes in the country’s long -standing debt rules to allow an additional defense expense and an infrastructure package of 500 billion euros ($ 562.4 billion).
Several of Germany’s key industries are under pressure. The automotive industry, for example, is dealing with a China competition from China and now faces tariffs, while problems in housing and infrastructure construction have been related to higher costs and bureaucratic obstacles.
Trade is also a key pillar for the German economy and, therefore, the uncertainty of changing tariff policies of the president of the United States, Donald Trump, weighs a lot in perspectives.
