An overview of the construction site of the Stuttgart 21 train station project was seen on May 22, 2025 in Stuttgart, Germany.
Thomas Niedermueller | Getty Images News | Getty Images
Germany's newly cast government is seeking the private sector to help save the country's sick infrastructure.
Economy Minister Katherina Reiche calls for cash injections earlier this month:
“We need speed and investment, we need private capital,” she told CNBC. “Of all the investments we are going to do, 10% of which can be done with public funds, and we need 90% of the private sector investment.”
After a long period of underinvestment and restrictions related to the country's fiscal rules, Germany has been filled with infrastructure problems, leading to bridges, broken train tracks and limited digitization.
These issues are the top priority of the new government under its alliance agreement. Earlier this year, Germany also listed the 500 billion euros ($564 billion) special investment funds for infrastructure and climate in its constitution, as well as amendments to its fiscal rules that would increase defense spending, both widely seen as potential improvements to the country’s hard economy.
"In general, there are certainly great opportunities for defense and infrastructure," JP Morgan euro zone economist Greg Fuzesi told CNBC.
Stefan Wintels, CEO of German Investment and Development Bank KFW, said the enthusiasm for investment opportunities in Germany seems to have become global.
He told CNBC on a sideline at the Tegernsee summit earlier this month: “There is a lot of interest…I am in New York, London and Zurich this year. I observe and feel a lot belongs to Germany.
Robin Winkler, chief German economist at Deutsche Bank, responded to the sentiment and told CNBC that recent political moves could spark a wave of private sector investment.
“There is a significant gain from investor interest in German infrastructure,” he said. He noted that mobilizing private capital is crucial to the government and “get greater sensation from new special funds.”
Winkler explained that besides Berlin's plan to spend a lot of money on infrastructure, its commitment to cut the traditional tape festival could also be attractive to investors.
"Infrastructure projects in Germany have been hampered in recent years by bureaucracy and too many regulatory barriers. There is now an ambitious plan to reduce these barriers ... We hope these reforms will also inspire private infrastructure investment."
Berlin also suggested further measures could be taken to incentivize private investment, and Economy Minister Reiche told CNBC that the government needs to “develop plans and invest in our infrastructure for the private sector.”
The Corolla Bridge in Dresden has become a symbol of the state of infrastructure in Germany. It collapsed in part of September 2024, when the last Earth train of the night passed by several minutes.
Part of the Corolla Bridge above the Elbe River collapsed.
Robert Michael / Photo Alliance by Getty Images
According to the organization's transportation and environment, thousands of bridges in Germany need to work, requiring a total investment of about 100 billion euros.
Elsewhere, German train company Deutsche said that by 2034, approximately 150 billion euros will be needed to modernize, maintain and expand its existing networks and improve digitalization.
More broadly, a report from the Cologne Institute for Economics published in May 2024 shows that it will take 600 billion years to push the country toward infrastructure.
Jens Thiele, head of project financing and company at Hamburg Commercial Bank, told CNBC that despite political momentum, issues with infrastructure investment remain, including concerns about time pressure and capacity.
"It's interesting to see how long it will take to bring the project to the RTB (ready to do business) stage and whether there is enough capacity to develop all of these projects in such a compressed time," he said in a written comment.
Fuzesi of JP Morgan also pointed out that timing is a key issue.
“Investors asked questions about delivery speed,” he said. “Infrastructure is a very broad definition, so one area can be overcome by doing more in another area. Ultimately, this will come down to political will. ”
He added that it is unclear when and how successful the government’s goal of simplifying the planning process will become a reality.
For the German government, pressure will soon implement its investor commitments and its investment goals.