Germany’s geostrategic position places it at risk in a potential conflict, prompting experts to call for urgent improvements in both defense and infrastructure sectors, according to a report by BZ.
The recent East German Economic Forum in Bad Saarow highlighted these concerns. Experts emphasized the importance of using the billions allocated by Friedrich Merz effectively. As one participant summed up the dilemma, “Which bridges will tanks drive over?”
The forum’s optimistic start gave way to a more cautious outlook, with significant challenges facing the German economy coming to light. Katrin Kluver Ashbrook from the Bertelsmann Foundation noted that cyberattacks inflicted damages of around €267 billion on German companies in 2024 alone.
“In 2022, this figure was three times higher than the amount Germany paid in turnover tax,” Ashbrook pointed out, urging entrepreneurs to recognize the urgent need to bolster corporate resilience.
Highlighting rising foreign interference, Ashbrook warned that “interference by other states in our economic structures will increase,” primarily from the People’s Republic of China, “even more than from Russia.” She described this threat as an “axis of illiberalism” aimed at weakening society’s cohesion and resolve.
Lieutenant General Andre Bodemann of the Bundeswehr emphasized Germany’s vulnerability: “Germany’s geostrategic position in Europe makes us a target.” He detailed the country’s exposure to hybrid attacks, disinformation, cyberattacks, and sabotage, noting, “From a formal-legal point of view, we are not at war, but it has long ceased to be a state of peace.”
Bodemann stressed the importance of maintaining stability in crises, such as ensuring a reliable energy supply and knowing how many reservists companies can rely on to “continue production.”
Rene Reichardt from Silicon Saxony pointed out the high costs involved in increasing resilience, especially in sectors like microelectronics. “Resilience in terms of independence is practically unattainable” in the semiconductor industry, he said. Still, he acknowledged the necessity of long-term investment, hopeful that the new federal government’s multibillion-euro debt relief package would help.
Merz’s debt growth reforms aim to exclude defense spending over 1% of GDP from budget limits. He explained that approximately €45 billion remains under deficit rules, but “all expenditures exceeding this amount will not be subject to these limits.”
Michael Hüther, director of the German Economic Institute, welcomed the investments but emphasized the need for companies to regain confidence in Germany’s business environment.
Balancing resilience, defense, and competitiveness requires significant public investment in both infrastructure and military capabilities. Hüther echoed the critical question: “Which bridges will tanks drive over?”
He warned that without easing fiscal restrictions, businesses will lack long-term prospects. However, achieving this depends on “real economic growth of 2%” annually over the next five years — a target currently uncertain as the IW recently forecasted continued economic decline in 2025.
