Bunchancellor Olaf Scholz presented himself in his speech at the World Economic Forum in Davos primarily as a seller of the merits of the German economy and the German economic model. All other topics, including the war in Ukraine, played a much smaller role in his remarks.
The opportunity was not badly chosen. Since the outbreak of war, the performance and future viability of the German economy has been assessed far less favorably than before. Part of the respect that German industry in particular enjoyed has been lost. Well-known media in the English-speaking world have discussed the possibility of de-industrialization in Germany. And the German energy policy cannot be explained abroad anyway.
Lots of private capital
The Chancellor’s message was: The green transformation does not endanger the industrial base; on the contrary, it creates the long-term prerequisites for securing the competitiveness of the German economy, and it offers numerous promising investment opportunities. Whether this will happen remains to be seen; the inevitable change in German industry will see numerous losers.
But one issue that is often underestimated in the green transformation debate is the significant investment needs, which require the provision of substantial private capital. Investors around the world have already invested several trillions of dollars in sustainable investments – and if you ask around in Davos a little, you will see that investors continue to have a strong interest in sustainable projects.
Scholz was not the first head of state or government to promote investments in his country in Davos. But words alone are not enough. Last but not least, such investments require attractive framework conditions. Here the need for improvements in Germany remains very significant. Words must be followed by deeds.