As of: March 13, 2024, 6:08 a.m
By: Max Schäfer
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Foreign companies are becoming increasingly critical of Germany.
Political stability is a concern.
Some are thinking about moving away.
Munich - War in Ukraine, an increasingly realistic participation of the AfD in government in the coming elections, disputes in the traffic light coalition and a weak economy: Germany will be confronted with a series of crises in 2024.
The situation is not only tense at home.
Investors from abroad are also looking forward to the developments.
Doubts about the country's political stability are becoming clear.
Only 58 percent of the CFOs of subsidiaries of foreign corporations still rank Germany among the five most stable European countries.
This is the result of a survey by the auditing firm KPMG, the results of which
were first published by
Handelsblatt .
Foreign companies see Germany's political stability at risk
Confidence in political stability has fallen significantly among decision-makers in the economy.
Two years ago, 80 percent of those surveyed considered Germany to be one of the most stable countries in the European Union (EU).
“During the pandemic, Germany was perceived as crisis-resistant and stable because of its reliable political leadership and rapid implementation of the corona measures adopted,” said KPMG divisional director and study author Andreas Glunz to the
Handelsblatt
.
Since the start of the war in Ukraine, Germany's image has changed.
“With mega crises such as the war in Ukraine and the weak economic situation in Germany, this perception has changed.”
Survey on Germany as a business location: Investors miss a clear line on questions about the future
According to the survey, foreign companies lack a clear line on future issues.
In addition, almost a fifth of finance heads are of the opinion that Germany is among the five worst in the EU when it comes to meeting the needs of international investors.
Only 34 percent believe Germany is open to foreign investors.
Two years ago it was half that.
In addition to Tesla, numerous other companies are investing in Germany.
They are assessing the situation more and more critically.
© Lutz Deckwerth/dpa
In addition to political stability and the attitude towards foreign investors, the study organizers examined other factors such as labor productivity, traditional and digital infrastructure, the research landscape, openness to technology and available skilled workers.
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“Deadlocked energy transition” in Germany is a point of criticism, especially for energy-intensive sectors
Germany performs particularly poorly when it comes to digital infrastructure.
Only eleven percent believe that Germany is among the top five in Europe.
For one in four CFOs, Germany performs worst when it comes to the digitalization of public administration.
The shortage of skilled workers is also a major point of criticism.
Energy-intensive sectors also criticize the “stalled energy transition”.
They find themselves burdened by high energy costs.
According to KPMG, 15 percent see Germany in last place, 23 percent in the bottom five.
13 percent are thinking about relocating production abroad due to high energy costs.
“International investors are becoming increasingly critical of Germany’s weaknesses”
Germany's attractiveness is dwindling.
“International investors are becoming increasingly critical of Germany’s weaknesses,” said study author Andreas Glunz to
Handelsblatt
.
The development is alarming.
“The future of the location is at stake.” Germany has lived on substance for too long, said Glunz according to the press release.
The study authors recommend that politicians reduce bureaucracy and digitize administration.
In addition, approvals for settlements and expansions should be processed more quickly.
KPMG estimates that 500,000 qualified specialists are needed every year in the area of immigration.
Investments in future technologies, climate protection, digitalization and technologies related to digital security are also necessary.
Foreign companies see the transformation of Germany's business location as an opportunity
Foreign investors see an opportunity in Germany's energy transition and the goal of achieving climate neutrality.
“Billion-dollar funding packages are available to modernize the site.
International corporations have recognized that this offers opportunities and are starting mega investment projects,” said Andreas Glunz.
More than every second international CFO sees the transformation as an opportunity for their own company and is planning further investments.
In the study for the auditing firm KPMG, the opinion research institute Verian surveyed 350 CFOs of German subsidiaries of foreign corporations between September and December 2023.
Many come from the most important partner countries of the German economy, including the USA, China, Japan and Great Britain.
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