Acceleration of Reforms Urged by Bundesbank President

Germany faces significant ground to make up in multiple sectors such as rent, infrastructure, and defense, according to various assessments. Yet, remedying these issues remains a challenge.

, and ASMedia

2025 September 23 . 4:47 PM

2 min read

Accelerated Reforms Called for by Bundesbank President

Acceleration of Reforms Urged by Bundesbank President

Germany is gearing up for significant investments in infrastructure and defense over the next decade, with a special fund of 500 billion euros earmarked for the endeavour. The federal government plans to start these rapid investments from 2025, with a 12-year period of substantial funding allocated for projects in infrastructure, mobility, defense, and climate neutrality.

The announcement has been met with a call for action from various quarters, including Bundesbank President Joachim Nagel and Allianz CEO Oliver Bate. Nagel has expressed impatience regarding the solution to these issues, stating that the current mode of analysis needs to end and action must be taken. He has also emphasised the need for Germany to show courage to implement bold projects with the available funds.

Nagel has suggested considering setting up a separate legal framework for a certain portion of the investments, given the urgency of the situation. He also urged the need to convince the social democrats to implement necessary changes. Moreover, he emphasised that both capital markets and energy markets in Europe are still far too fragmented. His solution lies in bringing heads together and getting closer, even in Europe.

Deutsche Bank CEO Christian Sewing has echoed the sentiments, agreeing that it's crucial to show investors from abroad and the capital market that something is happening in Germany. He has stressed that only by demonstrating activity can more capital be attracted from abroad to Germany.

Allianz CEO Bate has appealed to the German government to follow through on planned infrastructure projects, expressing hope that the conservatives have finally understood that buying votes with unfulfillable promises is no longer sustainable. However, he has also warned that the state cannot keep spending more than it earns indefinitely.

Bate has also urged the need to convince the social democrats to implement necessary changes. Nagel, too, has expressed a similar sentiment, suggesting that the answer to current challenges is more Europe, to make the region more resilient.

In summary, the German government's announcement of planned infrastructure and defense investments has sparked a call for action from business leaders. They have urged the government to implement these plans swiftly, set up a separate legal framework for investments, and work towards a more integrated Europe to make the most of the available funds and attract more private capital.