What priorities is KfW setting in this process?
KfW is strengthening its focus on Germany as an economic centre. In the coming years, we will examine our activities even more closely to see whether they provide impetus for Germany’s competitiveness. As a bank with responsibility, climate action remains a key focus area. Climate action is not only a commitment to future generations, but also an important instrument for Germany’s competitiveness. KfW reliably supports its customers and partners.
Why is focusing on Germany as a business location so important right now?
I would like to illustrate the enormous pressure to act with a few figures.
- In the World Competitiveness Ranking, Germany has now fallen from 6th place in 2014 to 24th place.
- The International Monetary Fund expects the global economy to grow by 3.3 per cent in 2025, compared to just 0.3 per cent for Germany. Germany only grew insignificantly in real terms from 2019 to 2024 (0.3 per cent overall), while the USA grew by just over 12 per cent and the global economy as a whole even by almost 15 per cent.
- The German economy is losing global market share. World trade grew by 3.4 per cent in 2024; Germany’s exports fell by 0.8 per cent.
- Productivity of gross domestic product per hour in Germany is 10 per cent below the value of Switzerland (2022).
- Public investment (as a percentage of GDP, 2023) is well below the EU average.
Against this backdrop, we need an investment offensive in our infrastructure and education, less red tape and improved regulatory and tax framework conditions, as well as a discourse on how, above all, we can restore our international competitiveness in terms of prices.
What does competitiveness and economic growth mean with regard to the decarbonisation of society?
Germany still has a good starting position in green technologies, both in terms of innovation and exports, but has to face increasing competition – and ensure that it continues to keep up in the future. Germany is the only European country that can compete with the most important research countries in terms of the number of patents and is ranked fourth worldwide. Until 2021, we were the second largest exporter behind China. There is great pressure to defend our competitive position. Climate financing remains a key focus area for KfW. 2024 was the warmest year worldwide since weather records began. It was 1.55 degrees above the pre-industrial era and thus above the 1.5-degree limit of the Paris Agreement for the first time. As a bank committed to responsibility, we therefore continue to commit to national and international climate goals. Since 2017, KfW has committed around EUR 320 billion for the financing of climate action and environmental protection. In 2024 alone, this accounted for around EUR 30 billion of KfW’s total commitments.
How is KfW’s role changing?
Our traditional role is that of a banking implementer and crisis manager. Strengthening Germany’s competitiveness and financing sustainable change require KfW to re-examine how it understands its role. Because KfW can do more than provide money. What sets us apart is a unique position: close and stable networking with politics, our national and international financing partners, companies and their associations, municipalities and consumers, and not least with the global financial markets.
This gives us an expanded role:
- Advisor – when designing framework conditions,
- Facilitator – of need-based solutions,
- Catalyst – for new initiatives.
We already intensified the ways we fulfil this role last year and will continue to do so in the future. This is reflected in the successful implementation of initiatives.
Can you name specific successes?
The capital market plays a principal role in mobilising private capital for investments in sustainable change. That is why it is important to strengthen Germany as a financial centre. Policymakers have improved the framework conditions for this in recent years. This course needs to continue. KfW is actively playing its role through the WIN initiative, for example. It is a breakthrough in mobilising private capital for the growth capital ecosystem. Last year, KfW successfully coordinated this initiative on behalf of the Federal Government. An effective package of measures coupled with a strong financial commitment of more than EUR 12 billion by 2030 will create a completely new basis for young companies. Interest in WIN remains very high, so we expect further commitments from numerous stakeholders during the year.
The Capital Markets Conference on Energy Transition for Germany (CMCET) in July 2024 at KfW kicked off an in-depth dialogue between politicians and international investors on financing sustainable energy infrastructure.
KfW also supports the German financial industry’s initiative to revive the European securitisation market; this instrument is another building block in mobilising private capital. In addition, we support the financial centre initiative of the Hessian state government.
Mr Wintels, thank you very much for the interview.
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