Goldman Sachs Exchanges A German economic revival?
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Jun 10, 2025 Wolfgang Fink, CEO of Goldman Sachs Bank Europe SE and Head of Goldman Sachs in Germany and Austria, dives into Germany's economic landscape amid political shifts. He discusses the potential for economic revival due to new government initiatives focused on infrastructure and defense. The conversation also tackles the impact of U.S. tariffs on Germany's export-heavy economy, while exploring how businesses are adapting supply chains in uncertain times. Fink highlights the effects of changing investor sentiments on European equities and the evolving dynamics of corporate deal-making.
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Germany's New Government Priorities
- Germany's new government aims to tackle structural and short-term challenges with a massive program focused on infrastructure and defense.
- Boosting economic competitiveness and European alignment are also key priorities, alongside migration issues.
Germany's Fiscal Room Unlocked
- Germany has fiscal space to spend up to 500 billion euros on infrastructure and increase defense spending to 3.5% of GDP by decade's end.
- This fiscal impulse aims to improve competitiveness and support economic growth with public-private partnerships.
Impact of U.S. Tariffs on Germany
- U.S. tariffs may shrink the eurozone GDP by 0.5-1%, hitting Germany harder due to its export focus.
- This trade uncertainty causes business and consumer concerns, impacting demand and growth prospects.