€500bn German infrastructure fund could benefit British businesses
British businesses could benefit from Germany’s €500bn infrastructure fund, say leading audit, tax and business advisory firm, Blick Rothenberg.
Nils Schmidt-Soltau, head of German desk at the firm, said: “Earlier this year the German Chancellor, Friedrich Merz, announced a special €500bn infrastructure fund and promised to do ‘whatever it takes’ on defence. This significant government-led investment, and the stable nature of the German market provides great opportunities for British businesses looking to expand their international operations.”
He added: “The German Federal Ministry of Finance’s latest monthly report has revealed that the deployment of the infrastructure funds may already be underway, as investment expenditure over the 5-month period to May 2025 has increased by 43% in comparison to the same period in the prior year. The majority of the increase relates to a €4.24bn capital injection for Deutsche Bahn AG (the German railway operator), a first tranche of an €8.5bn equity investment expected to be made in 2025.”
Nils said: “The €500bn infrastructure fund is expected to be deployed over a 12-year period, creating big opportunities for companies engaged in road, rail and waterway infrastructure projects, as €300bn of the fund is earmarked for the modernisation of Germany’s transport infrastructure. €100bn will be available specifically for climate infrastructure projects and €100bn will flow to Germany’s 16 federal states for investment in local infrastructure projects ranging from energy infrastructure projects to local transport infrastructure projects.”
He added: “An advantage the German government has, is that compared to other advanced economies, Germany’s public sector net debt is lower, giving it more capacity to finance investment expenditure through borrowing. At the end of 2024, Germany’s public sector net debt as a percentage of GDP was estimated at 62.5% compared to 97.2% for the UK. Meaning British businesses are on more stable ground when it comes to investment promises being fulfilled by the German government.”