Banks worried about Germany’s economic prospects

The Federal Association of German Banks (BdB) lacks a long-term perspective for Germany. BdB boss Sewing called for reforms for higher growth.

The Federal Association of German Banks (BdB) is concerned about the future. Numerous strikes and protests since the beginning of the year have reinforced the impression that parts of the Federal Republic are standing still and blocking themselves, said Christian Sewing, President of the BdB, who is also CEO of Deutsche Bank, at the 23rd German Banking Day in Berlin.

Among other things, Sewing called for urgent investments in Germany. It would not be enough to open the debt brake on government investments. Rather, private money is needed. These would particularly drive growth and prosperity. The capital market is of great importance for this.

“European Capital Markets Union important”

Sewing sees the completion of the European Capital Markets Union as an important goal. After all, the need for investment is enormous not only in Germany, but also in Europe. “According to estimates by the EU Commission, the planned transition of the economy to net-zero emissions by 2050 alone will cost around 600 billion euros annually,” said the association president.

In this context, Sewing welcomed the results of the summit of the 27 EU member states last week. At the same time, he warned that the issue of capital markets union should not take a back seat again after the European elections.

EU now agrees on guidelines

In the summit declaration, the heads of state and government urged “immediate” advancement of the Capital Markets Union after years without much progress. Public and private financing is required for investments in key strategic areas and infrastructure.

There is resistance from smaller countries. Ireland is slowing down when it comes to aligning tax rates. It sees the lower rates for companies as a competitive advantage over large EU states that have other ways to attract companies.