Berlin is promoting political stability, infrastructure spending and economic reform as it seeks to reverse years of weak growth and restore confidence among global investors.
BERLIN — Germany is preparing an international campaign to attract investment and revive its struggling economy, as Chancellor Friedrich Merz seeks to reposition the country as Europe’s most stable and dependable destination for global capital.
The government plans to hold its first major investment summit in Berlin in October, bringing together international companies, financiers and senior policymakers. The initiative is intended to present Germany as a secure base for manufacturing, technology and long-term business expansion during a period of geopolitical instability and intensifying global competition.
For decades, Germany’s economic strength rested on a highly successful industrial model: affordable energy, strong exports, skilled workers and close commercial ties with major markets including China and the United States. That model has come under increasing pressure from higher energy costs, weak productivity, demographic change and growing competition in industries once dominated by German manufacturers.
The automotive sector has been particularly exposed. German companies face the costly transition to electric vehicles while competing with rapidly expanding Chinese manufacturers. Mechanical engineering, chemicals and other energy-intensive industries have also struggled with higher operating expenses and weaker international demand.
Merz’s government is attempting to respond with a combination of public investment, regulatory reform and more active promotion of Germany abroad. The chancellor has argued that Europe must reduce bureaucracy, strengthen its single market and accelerate economic decisions to close the widening growth and productivity gap with the United States.
At the centre of the strategy is an extensive programme of spending on infrastructure and defence. Berlin has loosened its traditionally strict fiscal framework to permit more than €1 trillion in investment over the coming years, according to plans highlighted by the government’s investment campaign. The money is expected to support transport networks, energy systems, digital infrastructure and military modernisation.
The shift represents a significant departure from Germany’s longstanding emphasis on balanced budgets and limited public borrowing. Supporters argue that years of underinvestment have left railways, bridges, electricity networks and digital services increasingly unable to meet the needs of a modern industrial economy.
Better infrastructure could also encourage private companies to invest by reducing delays and operating costs. However, the success of the programme will depend on whether authorities can approve and complete projects more quickly than in the past.
Germany’s complicated planning system has frequently delayed major construction and energy projects. Businesses have complained about lengthy approval procedures, labour shortages, high taxes and administrative requirements that vary across federal, regional and municipal levels.
The government has pledged to reduce those obstacles. Merz has said that faster decisions and lower regulatory burdens are essential if Germany and the European Union are to compete with the United States and China. At his summer press conference on July 15, he acknowledged that the government had made progress during the first half of the year but said the work completed remained “far from enough.”
Berlin has appointed former Commerzbank chief executive Martin Blessing as its investment commissioner, giving him responsibility for engaging with international investors and promoting Germany’s economic advantages. Blessing is also expected to play a leading role at Germany Trade and Invest, the federal agency responsible for attracting foreign companies.
The strategy builds on the “Made for Germany” initiative, under which more than 60 companies announced investment intentions worth over €630 billion during a three-year period. The commitments covered large corporations as well as medium-sized businesses and were presented as evidence that German industry remains willing to expand when the policy environment is supportive.
Nevertheless, investment announcements do not automatically translate into completed factories, research centres or infrastructure. Companies may delay or revise projects when economic conditions change, particularly if energy remains expensive or regulatory reforms move slowly.
Germany retains important advantages. It has strong legal institutions, high-quality research universities, an extensive network of specialised medium-sized companies and a diversified industrial base. Its sovereign credit ratings and central position within the European single market also make it attractive to investors seeking access to the wider continent.
The country remains a leader in engineering, industrial automation, chemicals and advanced manufacturing. Yet analysts have repeatedly warned that Germany is less effective at turning scientific research into commercially successful companies, especially in software, biotechnology and emerging digital industries.
The government is therefore seeking to expand investment in semiconductors, artificial intelligence, clean energy and defence technology. It also wants to channel more domestic savings into productive businesses and capital markets rather than relying heavily on traditional bank deposits and insurance products.
One proposed pension reform would direct a portion of workers’ savings into a publicly supported investment fund. Such a move would represent a cultural shift in a country where households have historically been cautious about stock-market investment.
Energy policy will remain one of the most difficult parts of the recovery. Germany’s industrial companies require large quantities of reliable electricity, but the transition away from nuclear power and Russian fossil fuels has contributed to uncertainty over costs and supply.
The government has promoted greater regional energy cooperation, including offshore wind investment and interconnected electricity networks in the North Sea. Germany and neighbouring countries signed an investment pact intended to turn the region into a major centre for clean-energy generation.
However, expanding renewable capacity will require new transmission lines, storage facilities and faster approval processes. Until those systems are completed, energy-intensive manufacturers may continue to reconsider whether future production should be located in Germany or in countries offering cheaper electricity.
The investment campaign is also important for the broader European economy. Germany is the continent’s largest industrial producer, and its factories support extensive supply chains across Central and Eastern Europe. Stronger German investment could increase demand for components, machinery and services throughout the European Union.
Conversely, continued German stagnation would weigh on the entire region at a time when the eurozone is already facing slow growth and renewed inflationary risks. The International Monetary Fund has forecast euro-area growth of only 0.9 per cent in 2026, while higher energy prices have complicated the outlook for consumers and businesses.
Berlin’s central challenge is therefore not simply to advertise Germany more effectively. It must demonstrate that announced reforms can produce visible improvements in infrastructure, regulation, taxation and energy supply.
Investors will judge the initiative by how quickly projects receive approval, whether electricity becomes more affordable and whether the government can maintain a predictable policy environment. They will also assess Germany’s ability to recruit skilled workers as its population ages and its labour market becomes increasingly constrained.
Merz is presenting political stability as one of Germany’s most valuable economic assets. In a period marked by trade disputes, war and rapid technological change, that message may appeal to companies searching for a reliable European base.
But stability alone will not restore Germany’s former economic momentum. The country must prove that it can combine institutional reliability with faster decision-making, competitive costs and a renewed capacity for innovation.
The October investment summit will offer Berlin an important opportunity to make that case. Its longer-term success, however, will depend on whether Germany can convert ambitious promises into functioning infrastructure, expanding companies and sustained economic growth.
