Investors' view of Germany: trend reversal in the financial situation!

Investors' view of Germany: trend reversal in the financial situation!

In recent months, the mood of international investors towards Germany has changed significantly. KfW boss Stefan Wintels reports growing interest in investments in Germany, particularly in the areas of infrastructure, digitalization and climate protection. This is seen by many as an opportune time to attract capital from abroad, particularly as many institutional investors over-invested in the US are looking for new opportunities in Europe. Wintels is observing increasing interest in roadshows in metropolises such as New York, London and Zurich.

A central reason for this rapid change in mood is Germany's political stability. Investors prefer locations that offer reliability and stability. Wintels highlights the coalition agreement, which offers crucial starting points for investments, including the modernization of the infrastructure, the reduction of bureaucracy, digitalization, the immigration of skilled workers and the climate targets for 2045. It makes it clear that massive sums must be mobilized to secure future investments, while Germany has nine trillion euros in private financial assets.

Challenges for investments

Nevertheless, Wintels sees challenges in the regulatory environment. The strong regulation of the financial industry in Europe prevents financial institutions and insurers from providing certain types of financing. He calls for a review of existing regulations in order to make necessary adjustments without endangering the stability of the financial system. Capital is also urgently needed from Asia, the Middle East, Great Britain, the USA and Canada.

A look at the general mood among European companies shows that the willingness to invest in sustainable and digital transformation processes is growing. According to a survey by the European Investment Bank (EIB), 61% of EU companies have already invested in climate action, an increase compared to previous years (56% in 2023 and 53% in 2022). In addition, 74% of companies use digital technologies to increase their competitiveness.

Changes in the corporate landscape

The survey also provided interesting insights into the challenges faced by companies. Despite the willingness to invest, 46% of EU companies see high energy costs as a significant hurdle and 34% see the green transition as a business risk. Nevertheless, 27% of companies show a positive outlook on the transition to a net-zero economy within the next five years. The pressure from the USA is also considerable, as 90% of companies there are taking measures to reduce greenhouse gas emissions.

The EIB is planning an action plan to support the Capital Markets Union and close the financing gap, with the survey including data from around 12,000 companies in the EU and a comparison group from the US. These developments clearly show that both investors and companies are increasingly concerned with the topics of climate protection and digital transformation.

In summary, Germany is facing a turning point: the growing interest of international investors and the progressive measures taken by European companies in the area of ​​sustainability could make a significant contribution to securing the country's future. Wintels’ assessment and the results of the EIB survey are clear indicators that Germany is becoming more attractive again as a location.

For more information read the full article World and the EIB press release EIB.