GERMANY AND THE TROUBLESOME ALTERNATIVE
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Germany’s economy minister has warned that rising support for the far-right Alternative for Germany could undermine the government’s efforts to woo foreign investors, as it seeks at least €3.75tn in private capital by 2040.
Speaking to the FT ahead of Germany’s first investment summit in Berlin in October, Katherina Reiche warned that growing political support for the far-right AfD might “raise concerns” among potential investors.
Chancellor Friedrich Merz’s coalition government is hoping to use the event to secure big commitments from international investors such as pension funds and private equity groups. It is part of Merz’s efforts to revive a stagnant economy facing structural challenges, including stiff competition from China, high energy prices and a rapidly ageing workforce.
But weeks before the “Invest in Germany” conference starts on October 19, the AfD may secure historic wins in elections in two former East German states.
Notably, the far-right party is within reach of securing an absolute majority in Saxony-Anhalt in September, according to surveys. Germany’s domestic intelligence agency has said the AfD is potentially a threat to the country’s democracy.
“Looking at the AfD’s programme, it’s very clear that they are [opposed to the] market economy,” said Reiche, adding that the programme was a “wild mixture” lacking “a clear concept” on economic policy and containing “socialistic elements”. Reiche, who was born in former East Germany, described the AfD as one of the “best allies of [Vladimir] Putin”.
Reiche’s warnings echo those of Tanja Gönner, head of BDI, Germany’s main industrial lobby, who earlier this month called a potential AfD role in a state government “disastrous”, arguing it would create uncertainty and weaken Germany as an investment location.
Merz’s government is seeking to leverage its debt-funded investment programme, with “at least €3.75tn in additional private capital” by 2040, Reiche said.
This would come in addition to about €1.9tn in public investment over the same period, according to Reiche. The government has relaxed its constitutional debt brake in order to invest in equipping the country’s armed forces, repairing its neglected infrastructure and decarbonising energy networks.
Reiche said she had spoken to US, Asian and Middle Eastern investors to pitch what she described as a once-in-a-lifetime opportunity to invest in the country’s fabled “Mittelstand” — family-owned small and medium-sized companies that are facing a generational shift.
Europe’s biggest economy has taken inspiration for the October summit from similar initiatives in other countries, including French President Emmanuel Macron’s “Choose France” conference, which produced a record €93bn in investment commitments earlier this year.
The German government is expecting up to 200 investors to attend, including Goldman Sachs chief executive David Solomon and BlackRock boss Larry Fink, who once employed Merz as the firm’s chair for Germany.
Reiche, a member of Merz’s centre-right Christian Democratic Union party, stressed that Germany remained, despite its current weaknesses, an “industrial powerhouse”, boasting competitive “industry networks”, “cutting-edge research” and a “highly skilled workforce”.
“It is the first time we [in Germany] are selling our star power. The government for the first time sees a necessity in doing this and in offering business opportunities, not only state-driven but leveraged by private capital,” she said.
US investors, Canadian pension funds and infrastructure groups, as well as investors from the Gulf, Singapore and Japan, have already expressed an interest in backing projects in the country, according to Reiche.
Global money managers were also looking “very closely” at the Merz government’s “reform agenda” and acknowledged “the steps we have made”, including its plan to add a capital markets element to Germany’s state-run pension system, she said.
“Their concern is how the reforms will go further,” Reiche said.
At home, a number of prominent CDU politicians as well as Social Democrats have started to question parts of the planned pension reform, in particular axing early retirement incentives for workers with 45 or more years of employment history, raising doubts about the government’s ability to implement it as planned.
Despite such concerns, Reiche stressed that many investors she had talked to were looking beyond the immediate political and macroeconomic challenges. “They look at the business case of companies [and] the value they find here.”
Germany’s domestic perspective on its corporate sector can be too pessimistic, she argued.
“Sometimes we tend to forget our strengths,” she said, adding that, “surprisingly”, international investors have a clearer view of them.
At October’s conference, investors will meet Merz, finance minister Lars Klingbeil, Reiche and several other top ministers at the ESMT Business School next to the foreign ministry and the rebuilt Berlin palace.
“We will have a line-up [of top government ministers] of half a soccer team showing up,” said Reiche, stressing that the coalition was aligned over the investment agenda. The CDU, its Bavarian sister party CSU, and Social Democrats, which form Merz’s coalition, “are showing their commitment at this conference.”
Europe faces a shortage of homegrown rocket launchers by the end of the decade, the head of the European Space Agency has warned, as growing demand to launch new satellites into space outpaces the region’s independent capabilities.
ESA’s expectation “today [is] that Europe has a shortage of launchers around the 2030 timeframe,” said director-general Josef Aschbacher, in a frank acknowledgment of the scale of Europe’s challenge in catching up with their main competitors, the US and China.
The agency was in the process of assessing the scale of Europe’s requirements over the coming years, Aschbacher told the FT in an interview.
“If we add up all the satellites that need to be launched from current and planned constellations and missions . . . we see that there’s a peak of launch requirements around 2029, 2030, 2031,” he said.
The US and China have launched hundreds of satellites in the past five years and invested billions of dollars into developing defence and space capabilities. Elon Musk’s SpaceX launched 170 rockets last year, while Europe launched just eight. Musk has transformed the market with reusable rockets that have cut costs.
Aschbacher said he planned to raise the issue with ESA’s member states to “ensure that we can launch our satellites with European launchers”.
Europe plans to launch a range of satellites and other missions over the coming years for its satellite networks, including ones for the Iris² multi-orbit constellation, the Galileo navigation system and Copernicus, the world’s largest Earth observation network.
At the same time, several countries, including Germany, have proposed their own national constellations of satellites. ESA is also building satellites for some of the national defence ministries, including for Greece, Spain and Poland.
Yet Europe’s ability to deliver on these ambitious plans faces an uphill battle, with sceptics warning that structural reform, including to its procurement model, is urgently needed.
The region’s flagship heavy-lift rocket manufacturer, Ariane, has been plotting a comeback after production delays meant its latest model, the Ariane 6, was not ready to take on new cargo after the final flight of its predecessor in 2023. That led to a year-long gap during which Europe was forced to rely on SpaceX instead.
Europe finally regained sovereign access to space in July 2024 with the launch of Ariane 6 and, in December of that year, the return of the smaller, Italian, Vega-C rocket to flight.
Aschbacher said he strongly believed Europe would be able to bridge the expected shortages.
ESA, he said, had asked European launchers to come back in the coming months with estimates of what it could cost to expand their programmes, in Ariane 6’s case, from the current nine to 10 a year it is building up to, to about 15.
ESA was having similar discussions about Vega C, he said. This would feed into decisions over where ESA might put extra money to try to bridge the shortages and invest for the next decade.
“The time horizon is 2035 — the decisions we are making now [will be] triggered by those reflections,” he said.
The writer is chair of Rockefeller International. His latest book is ‘What Went Wrong With Capitalism’
Even a year ago, chatter around New York evoked a rotten apple, with rats and crime gnawing at the reputation of the world’s premier city. Millionaires were moving in droves to more business-friendly places like Miami. Foreigners were staying away, repelled by the agenda of the hometown president, Donald Trump. Now we’re having a summer for the ages.
I’ve lived here for 25 years and can’t remember a more energetic buzz. It started with the Knicks winning the NBA title for the first time in over half a century, with a disarmingly blue-collar roster. Then came the best-attended World Cup ever. But the excitement goes deeper than great moments in sports. Tourists kept flooding in after Spain’s victory, if the crowds around Rockefeller Center are any indication.
A booming Wall Street is turning midtown into an even more dense village of the world’s most powerful financiers, who pull in other industries. June saw a monthly record $4.7bn in new venture capital investment in New York, a third of it coming from outside the US and more than half going into AI start-ups. The AI entrepreneurs are said to be “feasting on Manhattan office space”.
New York recently passed San Francisco as the hottest US office market, driven by demand for prime spaces and trophy buildings. JPMorgan’s bold new bronze and rock tower on Park Avenue has been called a “thrilling addition” to the skyline, and has become a must-see for visitors who can wrangle an entry.
The city remains America’s biggest magnet for young professionals chasing careers from finance and media to law and, increasingly, AI. New recruits in their twenties seem to sense that it’s worth stretching to live in a city where networking can be done more effectively within a short walk, rather than online. New York ranks as both the most walkable US city, and the number one destination for college grads seeking office jobs.
Another big draw for the young is the vibe around the Democratic socialist mayor, Zohran Mamdani. Even my most liberal friends, foreign or American, no longer begin conversations by complaining about Trump. Instead, they marvel at Mamdani’s ascent.
By governing as a pragmatist — keeping a tough police chief, cutting red tape to help small business, pushing tax-the-rich proposals but not too hard — Mamdani is exasperating the far left. But he is also making it harder to associate NYC with ideological hostility and Trump.
Crime rates are falling; the number of murders hit an all-time low in the first half of this year. The exodus of millionaires to Miami, scared off by tax threats and crime, has slowed. Net international immigration remains positive despite the immigration crackdown. Ridership on the main commuter rail lines into Manhattan is climbing back towards pre-pandemic levels.
The impact of incoming traffic is visible all over town. Broadway box office revenues are close to breaching the $2bn threshold in the past year. My summer concert calendar included Bruce Springsteen, Shakira and Rüfüs Du Sol, a line-up reflecting New York’s status as the world’s biggest draw for top artists. The restaurant scene too is as hot as I’ve ever seen.
For years I’ve called New York the second-best place to try any national cuisine — after its home country — except for Indian. But recent arrivals, including the tough-to-book Ambassadors Clubhouse, have made New York a tie with London at number two for Indian.
After trying about 20 new restaurants this summer, I’d give 10 of them a “Wow!”. The new thing is opening eateries in a museum or gallery; my favourite is “Marcel” in the Sotheby’s headquarters on Madison Avenue, where the decor is itself a work of art.
To be sure, old flaws persist. Rats still scurry boldly around Central Park during my evening runs. Giant garbage bags blot street corners. The city is increasingly difficult to afford, whether you are shopping at a bodega or for an apartment. While foreigners and recent college grads are moving in, older Americans are not. But the affordability barrier is in part proof of liveability. To borrow what Yankee star Yogi Berra once said of an iconic restaurant, nobody comes here anymore, it’s too crowded.
Recent surveys don’t count New York among the world’s best cities to live in, which makes me wonder who they are surveying. Small European capitals dominate the top spots; minor Chinese metropolises feature among those rising fastest up the ranks. But if these places are so attractive, why don’t they draw in more people? This sizzling summer is a reminder that New York remains by far the world’s premier city.
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