Germany Proposes €100 Billion Resilience Fund
Amid recent geopolitical and economic challenges, European nations are seeking to strengthen resilience in defense, infrastructure, and critical industries. Germany is developing a €100 billion investment fund (Deutschlandfonds) to support companies and technologies that improve security and strategic operations. Initiated by Chancellor Friedrich Merz's coalition government, the fund focuses on strategic areas including energy, defense, and critical raw materials. With the objective of strengthening Germany's economic stability in the face of global uncertainties, the new flagship fund is part of efforts by Chancellor Friedrich Merz’s administration to revive growth in Europe’s biggest economy after two years of contraction. The government plans to contribute €10 billion, inviting further investment from international venture capital, private equity, and family funds.
The fund will target large infrastructure projects, established businesses, and riskier investments in startups, with the goal of fostering growth and innovation. Securing funding for scaling startups has long been difficult in Europe, and Germany hopes this initiative will provide both capital and credibility.
Details on the launch timeline, investment structure, and strategy are still pending. The fund may combine existing proposals, such as a dormant €1 billion raw materials fund and potential defense-focused investments, and could consolidate stakes in major infrastructure firms and industrial ventures.
The size of the Germany Fund means it could attract spending in other areas, like affordable housing, reflecting the coalition government's diverse interests. This move aligns with Germany's broader efforts to revise its fiscal policies, including changes to its “debt brake,” enabling greater infrastructure and defense spending. Investments from the fund will be structured as equity stakes, exempting them from borrowing limits. The fund will operate separately from Germany’s sovereign wealth fund, planned to reach €200 billion by 2036. Following approval from Merz and support from Finance Minister Lars Klingbeil, the project is expected to begin in September or October, after parliament's summer break.