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Can massive state spending turn the German economy around?

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Kate Ferguson
November 7, 2025

After years of economic stagnation, Germany is investing huge sums into modernizing its infrastructure and promoting climate-friendly technology. Will it be enough to turn the country`s economic fortunes around?

Germany is investing €500 billion over 12 years to modernize its infrastructure and accelerate its climate transition, targeting rail upgrades, clean energy expansion, and public services. Projects like the Berlin-Hamburg rail modernization and geothermal plant renovations reflect this push, while initiatives like NeuConnect—a power link to the UK—aim to lower electricity costs and improve energy efficiency. Geothermal energy is gaining traction, with experts saying it could meet half of Germany’s heating needs if supported by streamlined regulations and skilled labor.

Despite progress, concerns remain over rising debt, slow implementation, and fund allocation. Experts urge faster construction timelines and better use of public-private partnerships to maintain momentum.

 

This video summary was created by AI from the original DW script. It was edited by a journalist before publication.

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