German Spending Ramp-Up Fuels Business Optimism, S&P Global Says
Firms highlighted that the upcoming ramp-up in public spending, alongside technological advancements, are expected to support a broader economic upturn over the next 12 months, S&P said in its June German Business Outlook.
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2 hours ago
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Germany's top firms present Merz with investment push to revive economy
Germany's Chancellor Friedrich Merz is meeting with executives from 61 companies on Monday who have collectively pledged €631 billion of investments by 2028 to restore confidence in the country's economy. The firms — including heavy hitters such as Deutsche Bank and Siemens — will present Merz and Finance Minister Lars Klingbeil with their "Made in Germany" initiatives. The €631 billion includes capital investments, expenditure on research and development as well as commitments from international investments, according to the companies. Germany's economy, once considered a powerhouse within Europe, has been in recession for two years in a row and is projected to face a tough 2025 with growth projections among the weakest in the developed world. Siemens CEO Roland Busch clarified to Handelsblatt newspaper that the money announced by the companies was "fresh capital, but also capital that has already been committed". He added: "We need the courage for structural changes in politics, and it is imperative that big steps follow." Firms at the meeting on Monday are expected to lobby the government for faster approvals for infrastructure projects and measures to combat Germany's labour market shortage. Related Chancellor hopeful Merz open to reform of Germany's debt brake Germany's economic sentiment hits highest level since early 2022 The German government outlined that the meeting will focus on how to improve the investment climate and attractiveness of Germany as a business location. Merz has made revitalising Germany's economy one of his top priorities since entering office, emphasising during his summer press conference last week that his coalition was "taking the issue of cutting red tape really seriously". The meeting's announcement comes ahead of an expected spending surge by the German government, enabled by a recent reform to lift debt brake rules and the creation of a special fund for infrastructure investment. According to the president of the country's Ifo Institute for Economic Research, Clemens Fuest, the initiative to promote innovation and new businesses is a good sign, as was the creation of the infrastructure fund. Despite this, the German government has "adopted a series of measures that neither limit spending nor strengthen growth potential,' Fuest said. These include an "early-start pension plan" burdened by bureaucracy as well as the permanent reduction in value-added tax in the hospitality sector. 'Overall, the review of the German government's economic policy reveals pros and cons,' he said.
Yahoo
2 hours ago
- Yahoo
Germany updates: Companies pledge €631 billion investment
An alliance of top German companies pledged to invest at least €631 billion ($733 billion) in Germany over the next three years. Chancellor Friedrich Merz met with executives from top German firms on Monday, hoping to rally fresh investment after two years of recession. While the government has approved billions in tax relief and a €500-billion ($580 billion) fund for infrastructure and climate, Berlin says public money alone won't be enough. Below is a roundup of what Germany is talking about on Monday, July 21: Far-right AfD want new interview following protest disruption Germany's far-right Alternative for Germany (AfD) has called for a new television interview to be held, after protesters on Sunday drowned leader Alice Weidel's "summer interview" in Berlin. Each year, broadcaster ARD holds annual televised question and answer sessions with the country's main political parties. However, as Weidel was preparing to begin the interview on a terrace in Berlin's government quarter, demonstrators arrived nearby. They broke into loud singing, dancing, and chanting and made it difficult for Weidel to hear the questions she was being asked. "In such a situation, ARD should have moved to a studio to ensure a fair, uninterrupted interview," Markus Frohnmaier, the AfD's deputy parliamentary group leader, told news portal Politico. "I expect the conversation to be repeated under fair conditions," Weidel said. Meanwhile, the general secretary of the conservative Christian Democrats (CDU) who lead Germany's coalition government, said it was better for democracy to hear her views. "If you want to strengthen the AfD, go ahead and disrupt these interviews," Carsten Linnemann told broadcasters RTL/ntv. German corporate alliance pledges to invest €631 billion over 3 years An alliance of German companies, numbering in the dozens, pledged to invest at least €631 billion ($733 billion) in the German economy over the next three years. "The investments by the initiative are a very powerful signal that we are now experiencing a shift in sentiment and consolidating it," German Chancellor Friedrich Merz said. "The message ... is very clear: Germany is back. It's worth investing in Germany again. We are not a location of the past, but a location of the present and above all the future," he added. German Chancellor Friedrich Merz said that large public investments could be boosted significantly by private funding. "We want to leverage this potential and thus trigger further growth effects," Merz said after meeting with representatives of the "Made for Germany" initiative at the Chancellery in Berlin. The new government has launched a program to spur on investment and establish a €500 billion fund to splash on German infrastructure over the next 12 years. It has also pledged to cut bureaucratic red tape and speed up digitization. The initiative is being led by executives from Germany's blue-chip companies, including lender Deutsche Bank and industrial group Siemens. WATCH: Protesters derail AfD leader Weidel's interview A summer interview with Alice Weidel, the leader of the far-right party Alternative for Germany (AfD), was severely disrupted by protesters on Sunday. Members of her party have called for a repeat. Watch what happened here: German metal and electrical industries continue shedding jobs There has been a continued decline in the number of people employed in Germany's metal and electrical industry, according to the employers' association Gesamtmetall. The association said that since the beginning of 2025, there had been around 60,000 job losses. Basing its findings on a survey of companies, the association said that the number of employees in May was 2.5% lower than compared to the same period the year before. While Germany's new government has taken some measures to relieve the situation, Gesamtmetall's managing director Oliver Zander higlighted a reduction in the electricity tax and the immediate investment program as outstanding issues. "The speed at which the decline in employment in the metal and electrical industry continues shows, however, that the federal government has no time for breathers," Zander said. How Germany manages extreme heat and climate change The next heat wave has been forecast in Germany. How is a country known for its lack of air conditioning preparing? Read the full story about Germany's preparations for heat waves. How far-right social media impacted Germany's highest court Researchers say a far-right social media campaign — that painted a respected law professor as extremist — caused the suspension of the election of judges to Germany's highest court. Read the full story on the controversial failure to elect a judge to Germany's top court. Why is Deutsche Bahn facing even more delays and cancellations? Once famed for never being late, German trains almost never run on time anymore. Deutsche Bahn has launched a refurbishment program that is likely to last at least a decade, and the costs and criticism are increasing. Read the full story on increasing delays on Germany's rail network. German bond yields ease ahead of key Eurozone data Germany's bond market calmed slightly on Monday after weeks of rising long-term interest rates. Investors are now waiting for new economic data from the Eurozone and a key decision from the European Central Bank (ECB). A bond yield is the return investors get for lending money to the government by buying its bonds. When bond prices go up, yields go down — so falling yields often reflect expectations of slower growth or lower interest rates. Economists believe the ECB will keep interest rates steady for now, but might cut them again as early as September. Some analysts think this week's Eurozone business activity data could show little change, partly due to global trade worries and a strong euro. That could make German government bonds more attractive, pushing their prices up and yields down. Germany, UK and Ukraine lead military aid meeting Senior representatives from around 50 countries are reconvening for another meeting of the Ukraine Defense Contact Group. The virtual session is set to begin with opening statements from German Defense Minister Boris Pistorius, UK Defense Secretary John Healey, and Ukrainian Prime Minister Denys Shmyhal. The Ukraine Defense Contact Group was first launched on April 26, 2022, at the US air base in Ramstein, Germany — leading to the term "Ramstein format." US President Donald Trump's turnaround on military aid for Ukaine is likely to be the main topic of discussion, as NATO allies work to facilitate the weapons delivery. Abuse survivors urge Vatican to act after prosecutors drop charges against cardinal Survivors of abuse within the Catholic Church are urging the Vatican to take action against Cologne Cardinal Rainer Maria Woelki, following years of controversy and a newly closed investigation. The plaintiffs accuse Woelki of shielding perpetrators and retraumatizing victims through his handling of abuse cases in the archdiocese. The complaint, submitted by all 12 members of the survivors' advisory board at the German Bishops' Conference, was drafted by physician and board member Katharina Siepmann. "The affected often experience the cardinal's behavior as offensive," said Siepmann, who suffered three years of severe abuse as a child and has served on the board since early this year. The body was established in 2022 to represent victims and advise the Church. The group's formal complaint against Woelki refers to alleged breaches of church law, not state law. "We ultimately hope that officials in Rome — and the pope himself — will view the cardinal's behavior as unacceptable and intervene," Siepmann told German broadcaster WDR. In May, Cologne prosecutors announced that Woelki would not face perjury charges in connection with his sworn statements about when he learned of abuse allegations in his archdiocese. The archbishop had been under investigation for more than two years. Woelki, who remains a cardinal and Archbishop of Cologne, took part in the conclave that chose Pope Leo XIV. Car crashes into trampoline, lodges in barn roof The small town of Bohmte near the city of Osnabrück in the northwestern state of Lower Saxony was the scene of a spectacular accident that left two people seriously injured, including a seven-year-old boy. For as yet unknown reasons, local police reported, a car appears to have come off the road at high speed before colliding with a parked vehicle and crashing through a hedge. It then landed on a trampoline, hitting and injuring the child who was playing on it, and bounced into the attic of a barn. Read the full story about the car that crashed into a trampoline in northern Germany. Merz to meet German business leaders on investment push German Chancellor Friedrich Merz is set to meet top executives from major German firms on Monday in a bid to restore investor confidence and revive the struggling economy. Representatives from around 30 companies — including Siemens and Deutsche Bank — are expected to attend the talks in Berlin, according to sources cited by DPA. More than a dozen firms listed on the DAX, Germany's main stock index, are among those invited. The meeting will focus on the "Made for Germany" initiative, launched by Siemens and Deutsche Bank, which aims to strengthen the country's investment climate. Participating firms are expected to outline upcoming projects and signal readiness to commit fresh capital. After two years of recession and amid a bleak outlook for 2025, Merz is urging companies to ramp up domestic investment. His government, which took office in May, has approved multi-billion-euro tax relief packages to stimulate growth. A government spokesperson last week pointed to the recently passed €500 billion (over $580 billion) infrastructure and climate fund, saying public investment will lead the way — but private sector participation is essential. Once Europe's growth engine, the German economy has been hit hard by inflation, energy price shocks, and mounting global competition in the wake of the pandemic and the war in Ukraine. Welcome to our coverage Guten morgen from the DW newsroom, overlooking the Rhine River in Bonn — the former capital of West Germany. You join us as Chancellor Friedrich Merz gets ready to woo some of Germany's biggest business bosses to help get the sluggish economy back on its feet. Top names like Siemens and Deutsche Bank are expected talks in Berlin, along with more than a dozen other DAX-listed giants. About 30 firms are set to join what's being billed as a major push to rebuild investor confidence in the country's economic future. Merz is under pressure after two back-to-back years of recession and little sign that 2025 will turn things around. Follow along for the latest on what Germany is talking about on Monday, July 21.
Yahoo
4 hours ago
- Yahoo
Companies pledge to invest over $700 billion in Germany over the next 3 years
BERLIN (AP) — A group of dozens of companies pledged Monday to invest at least 631 billion euros ($733 billion) in Germany over the next three years, sending a signal of confidence in Europe's biggest economy as the new government tries to breathe new life into it. The economy has shrunk for the past two years and is expected to stagnate this year. Chancellor Friedrich Merz's administration has made revitalizing it a top priority since it took office May 6. It has launched a program to encourage investment and set up a 500 billion euro fund to pour money into Germany's creaking infrastructure over the next 12 years. It is promising to cut red tape and speed up the country's lagging digitization. On Monday, Merz welcomed representatives of an initiative titled 'Made for Germany' to the chancellery to send a signal of confidence from and to private investors. The group currently includes 61 companies from across the economy, among them industrial conglomerate Siemens and financial giant Deutsche Bank. 'The investments by the initiative are a very powerful signal that we are now experiencing a shift in sentiment and consolidating it," Merz said. 'The message ... is very clear: Germany is back. It's worth investing in Germany again. We are not a location of the past, but a location of the present and above all the future.' He stressed that private investment is crucial to encouraging growth. The overall figure pledged Monday includes at least some already planned investments. Merz said the plans include investments in new facilities and in modernizing infrastructure, in research and development. Deutsche Bank CEO Christian Sewing praised the new government as being 'determined to end the reform backlog that has slowed us down for too long.' But he said that it still needs to do more, and the companies 'encouraged' the government 'to continue the course of reform.' 'Our priorities are clear: We want economic growth, we want to strengthen Germany's competitiveness, we want to defend or further expand our technological leadership and we want to bring our infrastructure into the digital age,' Siemens CEO Roland Busch said. The Associated Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
