Germany has unveiled a €30 billion Deutschlandfonds, a state-backed investment initiative designed to mobilise up to €130 billion in private capital and reinvigorate Europe’s largest economy after years of stagnation.
Coordinated by the finance and economy ministries and implemented via KfW, the fund will deploy guarantees, loans and equity stakes to de-risk private investment. Notably, 95% of the programme relies on guarantees, underscoring a clear policy shift: the state acts as a catalyst, not a replacement, for private capital.
Key focus areas:
- Industrial transformation & decarbonisation, including critical raw materials
- Energy transition, with support for renewables and geothermal projects
- Technology, defence, biotech and deep-tech startups and scale-ups
Specific measures include:
- Up to €8bn in guarantees for industrial transformation
- €600m guarantee framework for geothermal drilling
- Expanded venture capital financing, with €1bn earmarked for startups by 2030
Economy Minister Katherina Reiche summed it up clearly: the goal is to channel private capital where innovation is created, supply chains are strengthened, and long-term competitiveness is built.
Why this matters:
Germany is acknowledging a structural funding gap — particularly in venture capital. Startup investment per capita still lags far behind the U.S., and this fund is a signal that public balance sheets will now be used more strategically to unlock private risk-taking.
This is not stimulus. It is state-backed de-risking at scale — and a model other European economies are likely to watch closely.