Why Germany can surprise (and attract investments)

Germany can still surprise positively and something is finally changing in investor sentiment.
This is what emerged from an assessment expressed on Bloomberg by Dan Dees, co-head of global banking and markets at Goldman Sachs.
According to him, conditions for new industrial deals have begun to improve, German companies are exploring options to expand – albeit in the United States – and the startup scene is booming and vibrant.
In summary, the German economy may still be in the doldrums, but investors are starting to change their tune.
Why investors are still betting on Germany Germany has struggled – and still struggles – to revive its economy after the energy crisis, weakening global demand and long-neglected structural challenges, such as an outdated bureaucracy and an aging force Work.
The list of problems has raised questions about the country's ability to remain competitive and attract investment.
Now, amid signs that the ECB may cut interest rates in the coming months, German investor confidence is back on the rise, reaching its highest level in more than two years this month.
Reducing financing costs would be a key catalyst in convincing companies to increase technology spending on, for example, process automation and artificial intelligence, areas that Dees says German executives are keen to support.
“The mood among executives at German industrial companies is constructive, but decidedly more sober than the optimism of their colleagues in the United States,” Dees told Bloomberg News in a recent interview.
The expert just returned from a visit to Goldman Sachs' office in Frankfurt and its newly opened branch in Munich, where he said a growing number of tech startups – operating in artificial intelligence, health tech and gaming – promise to stimulate business flow and massive investment in infrastructure.
Several analysts actually say that Germany is in the midst of a recession after contraction in the last three months of last year and, according to their forecast, in the first quarter of 2024.
The country's recent poor economic performance – lagging behind all the others in the G7 – revived the nomination “sick man of Europe”, used to describe Germany's anemic growth at the beginning of the century, before structural reforms were implemented.
read also Birth alarm in Germany, so recovery recedes Dees, however, rejected this view, saying that the general sentiment among German executives, asset managers and startup founders “was better than I expected”.
For example, TSMC is currently building a chip factory in Germany, and the federal government in Berlin is also in advanced talks to buy the domestic business of Dutch network operator Tennet in a deal that could be valued at around 22 billion euros (24 billion dollars).
However, Germany and Europe as a whole have room for revival.
“Europe is one of the most advanced countries in terms of mobility, telephones and fiber connectivity, so the needs for data use are there.
We are just a long way behind…but there is a tremendous growth story ahead of Europe and data center infrastructure,” commented Raj Agrawal, global head of infrastructure at KKR & Co