May 9, 2025, Bavaria, Gmund am Tegernsee: Katherina Reiche (CDU), Federal Minister for Economic Affairs and Energy, takes part in the Ludwig Erhard summit. Representatives of business, politics, science and media take part in the three -day summit. Photo: Sven Hoppe/dpa (photo by Sven Hoppe/picture Alliance about Getty Images)
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Germany has to take more risks and increase its stagnating economy with a decade of investing in the infrastructure, said the German Minister of Economic Affairs and Energy Katherina Reiche on Friday.
“The next decade will be the decade of infrastructure investments in bridges, in the energy infrastructure, in storage, in the maritime infrastructure … and we need speed for this. We need speed and investments and we need private capital,” said Reis, Annette Weisbach from CNBC.
While 10% of the investments could be looked after with public funds, the remaining 90% laid out in the private sector, she said.
The newly shaped Economic Minister also dealt with regulation from Brussels and warned that he could prevent companies from growing and start-ups from growth if it is too restrictive. Germany had to learn that investments are associated with risks “and we have to be open to more risks,” she said.
In fact, the introduction of regulatory changes will be one of the most important jobs for the new German government, Veronika Grimm, member of the German Economic Expert, told CNBC on the edge of the Tegernsee summit.
“It will be important to adapt the regulation and to remove or change the regulation of the innovation level, so that more is possible again in many technology areas,” she said in comments that have been translated by CNBC.
“And then of course it is about improving the environment or the company and making it more attractive so that we can be competitive again,” said Grimm.
On the edge of the recession
The Germany's economy has been slightly commissioned both in 2023 and 2024, and the quarterly gross domestic product has been freaking between growth and contraction for over two years, only to avoid technical recession. Preliminary data for the first quarter of 2025 showed an expansion of 0.2%.
Forecasts do not indicate a great exhaustion of inertia, with the now former German government saying in the past month that the economy will still stagnate this year.
“This country needs an economic change. After two years of recessions, the previous government had to announce again [a] Zero growth year for 2025 and we really have to work on it. So an investor booster is on the top on the agenda, ”said Economy Minister Reiche.
The reduction in energy prices, the stabilization of the safety of the energy supply and reducing bureaucracy were among the most important points on the agenda.
This despite a large fiscal U-turn that was announced at the beginning of this year, including changes in the country's long-term debt rules, to enable additional defense spending and an infrastructure package of 500 billion euros ($ 562.4 billion).
Some of the key industries in Germany are under pressure. For example, the auto industry has dealt with a strong competition from China and is now pending tariffs, while problems in building building and infrastructure were associated with higher costs and bureaucratic hurdles.
Trading is also an important pillar for the German economy, and therefore the uncertainty of the changing tariff policy of US President Donald Trump strongly affects the prospects.
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