BERLIN (Reuters) -Leading German companies including Siemens and Deutsche Bank announced a major investment initiative on Monday aimed at resuscitating investor confidence in Europe’s largest economy.
The 61 companies, which have collectively pledged 631 billion euros ($734 billion) of investments by 2028, presented their “Made for Germany” initiative to German Chancellor Friedrich Merz and his finance and economy ministers at the chancellery.
“We are facing one of the largest investment initiatives that we have seen in Germany in recent decades,” Merz said at a news conference afterwards. “The investment tasks we are facing cannot be achieved by public budgets alone. On the contrary, the lion’s share must be provided by private investors.”
The initiative comes ahead of an expected surge in spending by the German government, made possible by a recent reform to debt rules and the creation of a special infrastructure fund.
According to the companies, the 631 billion euros include capital investments, expenditure on research and development as well as commitments from international investors. It was not clear what proportion of these investments were already planned, and which were new commitments.
Siemens CEO Roland Busch said the government, for its part, had to ensure there was “less regulation, to give companies more freedom and room for innovation.”
“We need to become bolder and faster, especially when it comes to decision-making and approval processes and, of course, digitalisation,” Busch said at the conference.
Clemens Fuest of the Ifo institute said the initiative was a “step in the right direction” but the longer-term economic impact remained to be seen.
“The question is, of course, is this really sustainable in the sense that it is not just a flash in the pan that is being financed with government debt, or will there really be more investment in the long term?” he said.
Reuters reported on the initiative to boost investor confidence in Germany on July 8, citing sources familiar with the matter.
($1 = 0.8598 euros)
(Reporting by Klaus Lauer, Writing by Friederike Heine and Miranda Murray; Editing by Kim Coghill and Christina Fincher)
