German economy minister: We must increase our competitiveness

German economy minister: We must increase our competitiveness

German Economy Minister Emphasizes Competitiveness Amid Global Challenges

Germany’s Minister of Economy, Katherina Reiche, has underscored the urgent need to enhance the country’s competitiveness in a rapidly evolving global landscape. Speaking before the German parliament on January 30, 2026, Reiche highlighted that traditional export-driven growth models are no longer sufficient, urging a pivot toward emerging sectors such as artificial intelligence (AI), advanced energy technologies, biotechnology, and defense according to the minister. This call aligns with broader efforts by EU member states to streamline regulations and bolster industrial resilience, as outlined in a joint statement from 21 EU economy ministers advocating for a revised Emissions Trading System (ETS) and reduced bureaucratic burdens according to Clean Energy Wire.

The EU’s ETS, a cornerstone of climate policy, is under scrutiny for balancing decarbonization goals with industrial competitiveness. Reiche and her counterparts argue that the upcoming ETS revision must prioritize cost-efficient emission reductions while safeguarding European industries from carbon leakage. The proposed reforms include a pragmatic approach to free allocation of emissions permits, ensuring coherence with the EU’s Carbon Border Adjustment Mechanism (CBAM) and fostering investment in climate-friendly technologies according to the EU economy ministers.

Germany’s economic challenges are compounded by structural issues, including an aging population, sluggish productivity growth, and reliance on legacy industries like automotive and mechanical engineering according to IMF research. The government has revised its growth forecasts downward, projecting 1.0% GDP growth for 2026 and 1.3% for 2027, citing global trade uncertainties and delayed policy impacts as reported by Reuters. To address these headwinds, Reiche advocates a dual strategy: expanding public investment in infrastructure, climate, and defense, alongside reforms to attract private capital. Currently, private investment accounts for 84% of total investment in Germany, but the minister emphasized the need for further private-sector engagement according to the minister's remarks.

At the EU level, Germany and France are spearheading a new forum with five other major economies to accelerate competitiveness measures, including resilient supply chains and eurozone financial coordination according to Reuters. These efforts reflect a broader recognition that Europe must adapt to geopolitical fragmentation and technological shifts to secure long-term prosperity.

As Germany navigates these crosscurrents, the focus remains on balancing climate objectives with industrial vitality, a challenge requiring both domestic reforms and coordinated European action.