Federal Finance Minister Jörg Kukies (SPD) has spoken out in favour of a greater mobilisation of private capital for the expansion of defence budgets in the European Union. As with other European future themes such as maintaining competitiveness in the field of artificial intelligence, or the renovation of the rail network, the majority of investments must be financed by the private sector, he said at the Börsen-Zeitung Finanzplatztag.

According to Kukies, this will require some beliefs to be questioned within the banks, especially about the self-imposed commitment to ESG. „The scepticism with which some still view the sector must be overcome,“ Kukies appealed to the audience, which mainly came from the financial sector, in his opening speech. The politician did not travel to Frankfurt because of the ongoing negotiations on forming a government, but instead joined via video conference.

The former investment banker left no doubt that he also wants to play a key role in the future federal government. „No matter what the constellation, we will continue to work for the competitiveness and well-being of the financial centre," he said. And he made some specific comments on the subject of securitisation, noting that "the fixed costs for the banks are simply too high here.“

Oliver Behrens, President of Frankfurt Main Finance, acknowledged that the tone between Berlin and the finance industry has changed. „After the financial crisis, we were happy when at least a climate of benevolent tolerance had emerged; now we seem to be one step further,“ he said.

However, the promises from Berlin must also be followed by actions, because the financial centre is dependent on the support of the federal government, Behrens emphasised. Initiatives at the local level, such as the cooperation between the mayors of Frankfurt, Eschborn and Offenbach, could help to make the region more attractive for international specialists. „But when it comes to creating the labour laws and tax conditions that enable the institutions to hire here, Berlin is called upon", he said.

This was also the reason why the Financial Center Cabinet set up by the Hessian state government recently submitted proposals to the Federal Ministry of Finance to improve the competitiveness of the financial hub. Because of the initial reticence of the two financial associations, and the criticism voiced behind closed doors from the fund industry, which initially felt that it had not been sufficiently taken into account, Behrens noted that a joint formulation of interests was not yet common practice. „I am all the more pleased that in the end we managed to formulate a joint paper in cross-pillar cooperation,“ he said.

However, Behrens wants to intensify cooperation not only within the German industry, but also at EU level, for example with the financial centre initiative Paris Europlace. Despite the competition, particularly for European securities trading, a constructive exchange is being maintained with the French capital.

With regard to the competitiveness of the German finance industry, Behrens described it as „shameful“ that foreign banks had overtaken domestic institutions in terms of the size of their balance sheets. To catch up, German institutions would have to expand their securities business, said the former Germany and Europe head of Morgan Stanley.