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Title page 1

Contents 6

Acknowledgements 3

Executive summary 4

Résumé 5

Reviving the German economy: Balancing economic, social, and defense priorities 7

Too little, too late: a German economy weakened by internal and external factors 10

A giant with feet of clay: the internal reasons for Germany's economic decline 10

Germany in the turmoil of international economic developments 13

Mobilizing resources: Both scattergun approaches and structural reform 21

A constitutional amendment to provide the German government with the necessary financial flexibility to revive the country's economy 21

Additional measures to strengthen the competitiveness of Germany's economic base 26

A change of course that raises both hopes and concerns 30

A German U-turn that highlights the trade-offs required at the national and European levels 30

Does the effectiveness of spending match the scale of the resources deployed? 39

Conclusion 47

Appendix 1. Investments 2024-2026 (current and targeted) 51

Appendix 2. Investments under the SVIK 2024-2036 (current and targeted) 51

Figures 11

Figure 1. A comparison of recommendations by economic institutes and think tanks regarding infrastructure spending compared to the SVIK 11

Figure 2. The evolution of trade between Germany and the United States (2020-2025) in billions of euros 17

Figure 3. The evolution of trade between Germany and China (2020-2025) in billions of euros 19

Figure 4. A breakdown of the SVIK by sector 22

Figure 5. Allocation of the SVIK across the federal government, the Länder, municipalities, and the Climate and Transition Fund 23

Figure 6. Statements by Chancellor Friedrich Merz, Christian Sewing the CEO of Deutsche Bank, and Finance Minister Lars Klingbeil 33

Figure 7. Poll on the economic competence of German political parties 39

Figure 8. Distribution of the SVIK 41

Figure 9. Allocation of the SVIK among the various federal states 41

Figure 10. SVIK Implementation Timeline 49

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