There is significant political uncertainty in the country. If the federal budget is overturned by the Constitutional Court and the government is in crisis, this is, of course, poison for the investment climate. Citizens are also unsettled. They lack the certainty that the state is equipped to meet the challenges. Despite rising real wages, they are, therefore, shying away from significant expenditure and saving instead.

German politicians lack a clear idea of where they want to go and how they can achieve this. We lack a visionary political leadership that says: In ten years, we want to have achieved this or that; let's tackle it. In other words, a leadership that gets people on board. And even once the federal government agrees on goals, there is disagreement on the question of funding and implementation.

That as well. A functioning coalition is, of course, a necessary condition for reforming a country. But just because a government is united does not mean that it is moving the country forward. I'm talking about a necessary initial spark that gives us the courage to change and take risks again so that we see the challenges of the future as an opportunity.

There are, of course, a few global economic developments, such as the current weakness of the Chinese economy, which are also affecting our economy. But if you look at the development of economic performance since the end of the financial crisis, you realise that we haven't really made any progress overall since then – compared to the USA, for example. Green transformation, digitalisation, and demographics were already problems back then. But we didn't tackle them decisively, instead we put them off. These challenges have not solved themselves in the past, nor will they in the future.

Many people are indeed now calling for the state to spend more money. However, the most important thing is that the state spends the money wisely in the first instance. That means providing incentives and getting private investors on board. It also means reducing bureaucracy and digitalising. There are certainly reasons to suspend the debt brake in order to invest primarily in security and defence. But money alone will not solve Germany's structural problems. A larger budget also increases the risk that our challenges will be postponed with money rather than finally solved. But it is also clear that the crisis is not the right time to make savings. That would be politically highly toxic.

Germany must not get bogged down in details, but must set the right course now in order to have solved the historic challenges of the Ukraine war, demographic change, and climate transformation in 20 or 30 years' time. It is also essential that this works at all, and not just in the most efficient way.

If we have to suspend the debt brake again for the projects or lose a few billion for unnecessary subsidies, it doesn't matter from a historical perspective. Failure in the climate transition, on the other hand, would be devastating. We simply need more pragmatism at the moment. The USA has shown the way by subsidising green technologies instead of making fossil fuels more expensive, as the economic textbook would have it. So far, at least, their success has proved them right.