Amid an economic downturn which has prompted fears of deindustrialisation, German economy minister Robert Habeck emphasised the strengths of the German economy and said that major investments of around €80 billion are in the pipeline.
Against the backdrop of Germany’s sluggish economic performance, Habeck tried to signal confidence in future prospects, emphasising that major investments are already underway.
“Currently, about two dozen companies are planning major investments in Germany, with a total investment volume of about €80 billion,” Habeck told Funke Media Group on Tuesday (8 August).
According to Habeck, this sum also includes planned private investments that have not been publicly known so far.
“From the pharmaceutical industry to battery cell production, from the semiconductor industry to hydrogen production, we have created a diverse biotope with a great willingness to invest, which will also bear clear fruit in the coming years and help to renew prosperity,” said Habeck.
“They want to invest here and will create value and jobs,” he added.
The German economy has been hit especially hard by the war in Ukraine and currently experiencing an economic slowdown due to inflation and high energy prices. According to the International Monetary Fund (IMF), Germany is the only major economy where GDP is expected to shrink in 2023.
The latest numbers from the Federal Office of Statistics are also painting a dark picture of the condition of the German economy, with industry production plummeting by 1.5% in June compared to May, a report stated on Monday.
However, Habeck tried to downplay these fears, stating that Germany should be more “confident” in its abilities.
According to German government sources, one of the major private investors is TSMC, one of the leading chip manufacturers. The Taiwanese manufacturer is planning to invest €10 billion in Saxony, which has become a national hub for chip manufacturers, business newspaper Handelsblatt reported. The government will reportedly subsidise the plant with €5 billion.
The announcement was also welcomed by France, with trade minister Olivier Becht stating on Tuesday that “it’s good news that Germany is economically attractive, though attractiveness is first and foremost European”.
“When you choose a European country, you choose the EU first,” he told journalists.
Multiple chip manufacturers have recently announced major investments in Germany in return for generous subsidies. In June, Intel announced it will invest €30 billion in Magdeburg in return for €10 billion in state aid and US chipmaker Wolfspeed plans to invest €3 billion in return for €500 million in state aid.
Habeck’s Green Party is currently also working on a new public investment package worth €30 billion to boost “sustainable growth, prosperity and the competitiveness of Germany as a business location,” a draft document seen by newsroom Redaktionsnetzwerk Deutschland reads.
However, it remains unclear whether the Green’s liberal coalition partner, the FDP, would support such a move.
“What is needed now is not short-term stimulus packages, but a strategic approach that includes cutting red tape, low taxes and increasing private investment,” FDP Secretary General Bijan Djir-Sarai told Funke Media Group.
*Théo Bourgery-Gonse contributed to the reporting
[Edited by Nathalie Weatherald]