KfW on the coalition agreement: strengthening the social market economy and competitiveness

• KfW mentioned more than 15 times
• KfW to bring its financial clout to the table
• Contribution to domestic and international financial cooperation

KfW welcomes the strengthening of the social market economy and competitiveness as well as the adherence to the German and European climate targets in the coalition agreement presented by CDU, CSU and SPD – subject to approval by the party committees.

“With its coalition agreement, the future German Federal Government has made a clear promise with respect to the social market economy and the German and European climate targets”,

said Stefan Wintels, Chief Executive Officer of KfW.

“We see extensive impetus for more investments and innovations that will make Germany more competitive, more confident and more secure within the European Union and contribute to improving people’s living conditions.”

As a bank, KfW will contribute its expertise and experience in key fields of action and also use its financial clout to promote such investment. Wintels:

“Wherever possible, we will actively provide support – in Germany as well as in international project and export finance and international financial cooperation.”

KfW is mentioned in the proposal for a coalition agreement with respect to numerous topics, particularly SMEs, construction and housing as well as education. Regarding German economic competitiveness, key aims highlighted in the coalition agreement “Responsibility for Germany” include:

• establishing a Germany Fund
• doubling investments in the WIN initiative for growth and innovation capital in Germany to more than EUR 25 billion and leveraging these investments even further with guarantees from the Federal Government
• continuing the Future Fund beyond 2030
• making use of KfW’s scope with respect to SME support in the most economical manner possible

When it comes to the promotion of private individuals, the future government's key aims include:

• merging and streamlining KfW’s funding programmes in the housing area into two central programmes (new-builds and modernisations)
• temporarily restoring promotion eligibility of the Efficiency House 55 standard
• setting up an investment fund for housing construction for providing equity and debt capital in combination with public guarantees (e.g. by KfW) and private capital
• replacing the current heating act with a more technologically open buildings energy act, which (continues to) promote the installation of climate-friendly heating systems
• improving the conditions of the KfW Student Loan

Regarding German and European resilience, key points highlighted by the coalition agreement include:

• the establishment of an investment fund for energy infrastructure
• the strategic further development of the Federal Government’s investment portfolio through an overarching strategy, in particular in the area of defence and energy
• a Geothermal Heat Acceleration Act and suitable instruments to hedge the exploration risk
• opening up public funding programmes for the security and defence industry
• providing additional resources to the raw materials fund
• a value- and interest-led development policy with a stronger focus on the following strategic priorities: economic cooperation and securing access to raw materials, combating the causes of displacement and cooperation in the energy sector
• awarding contracts for government-funded Financial Cooperation projects mainly to German and EU companies.

With regard to the exact design of the initiatives and programmes, KfW will contact the responsible departments after the coalition agreement has been adopted and the new government has been formed.

Until a new budget is adopted, KfW’s current promotional programmes remain open.

What's the current state of the German economy? What does the country need in order to be future-proof? In its position paper “Managing the transition, strengthening growth”, KfW discusses precisely these issues – with analysis of the current situation and recommendations for action in five policy areas. The paper can be downloaded from Papers and Proceedings on Economics | KfW