Berlin (AFP) – Major companies at an economic summit hosted by the German government have committed to investing around 230 billion euros ($258 billion), Chancellor Friedrich Merz said Tuesday in Berlin. “Investments are a key factor for the future of our country, for its growth and its competitiveness. They bring with them more jobs, increased production, more services, and a better future for our children and grandchildren,” Merz said.
The chancellor noted Amazon investments worth 16 billion euros and a German government partnership with US chipmaking giant Nvidia. He also mentioned unspecified commitments by the German retail conglomerate Schwarz Group, US investment firm Blackstone, software giant Microsoft, and the French pharmaceuticals giant Sanofi. Merz’s government hosted the two-day Invest in Germany summit as part of a push to draw more foreign money into Europe’s largest economy, which has struggled for years with sluggish growth and diminished global competitiveness for some of its blue-chip firms.
Current growth in Germany — projected at 1.3 percent for 2026 — is driven primarily by public investment, according to economic forecasters. During the gathering, which drew more than 200 corporate leaders to Berlin, Merz touted reforms aimed at streamlining regulatory requirements and cited a massive spending campaign on the country’s infrastructure and military. The inaugural German investment summit topped the 93 billion euros announced at President Emmanuel Macron’s “Choose France” summit in June, an event that served as the model for Merz’s gathering.
– ‘Nation of savers’ –
During his year and a half in power, Merz’s coalition government — an alliance between his conservative CDU/CSU and the centre-left Social Democrats — has focused on tax cuts and regulatory relief to stimulate the economy. But business leaders have grown impatient with the slow pace of reforms as German companies have battled high energy prices, US tariffs, and stiff Chinese competition, particularly in Germany’s renowned automotive sector.
“The government will continue to improve the conditions for investment in Germany — for example by reducing bureaucracy, accelerating the approval process, and enhancing infrastructure,” Merz said on Tuesday. The chancellor also touted efforts to get Germans — who by reputation are thrifty and conservative with their savings — to put more money into stocks and other riskier investments. The government has recently passed plans to create investment accounts for children to help fund eventual retirement costs, and is pushing to put some pension funds into stocks as well. “We’re turning the ‘country of savers’ into a country of investors,” Merz said.
– Amazon and Nvidia –
For the time being, only Amazon has announced a specific investment figure, saying it would spend 16 billion euros by the end of 2027. Amazon’s plans include putting nearly five billion euros into expanding its cloud computing division Amazon Web Services in the Frankfurt area as demand grows for AI services. Other planned investments include spending on Amazon Leo, which aims to provide high-speed internet via a network of satellites, and upgrading the company’s retail and logistics warehouses to use more robotics. The company’s Prime Video arm is also planning a slate of new film productions in Germany, according to the firm.
Merz opened the event late Monday, holding an on-stage discussion with Nvidia’s chief executive Jensen Huang, who praised Germany’s high-end engineering firms and research institutions. A partnership between Nvidia and the German government aimed at applying artificial intelligence to industry was also announced, although no figures were disclosed.
Merz has been weakened by record-low popularity ratings, persistent infighting in his coalition government, and a string of significant setbacks for his conservative party in regional elections. The chancellor has been seeking to regain some of his lost momentum by demonstrating Germany’s appeal to investors and bolstering the muted economic recovery.
© 2024 AFP
