We've been following very closely a lot of political unrest in France and other countries. There are question marks over Germany. I mean, what's it mean for an international investor looking at Europe right now?
Well, there is obviously the uncertainty and lots going on in Europe. I would though say that, actually, and we just did a survey at Deutsche Bank asking 1,200 executives, non-European executives, where their preferred investment would be over the next five years. And, actually, over 50% would say that they tend to invest in Europe. Now that has reasons for diversification. Clearly, in this world of uncertainty, it's not only Europe that there is uncertainty. We have also other places in this world where lots is going on. So people are obviously diversifying their supply chain, diversifying their investments. But they can clearly also see within Europe, and in this study, it also came out that within Europe, the most preferred destination is Germany, that there is actually the tendency and direction to focus on Europe, to focus on Germany. Nevertheless, you know, the situation in France is obviously concerning and will remain volatile, I think, up to the elections in May.
But, Christian, do you worry about a renewed debt crisis in Europe?
No. I wouldn't say... And I wouldn't call it a debt crisis at this point in time, but I think it's a wake-up call, in particular for public financing, that budget discipline is key, that you need to have your budget in order. And therefore, you know, yesterday, somebody very, very senior and very, very experienced said, the bond market is not lying, and I agree with him. And therefore, I do believe it is so important that in particular in times like we live, you have a disciplined budget, you have your debt under control. By the way, that clearly speaks for Germany. That gives us room now to invest while the world is in so much uncertainty.
There's also, of course, a lot of question marks over this coalition in Germany. Do you think Chancellor Merz still has a capability of pushing through reforms? Like, what do you need as a bank today?
Well, these are two questions. The first question is, yes, he does. And to be honest, the last two days here with the summit, the investment summit was, in my view, a validation of his absolute conviction what he wants to do with Germany. By the way, yesterday, we did not only have the chancellor, we had the vice chancellor. We had, I think, seven or eight members of the cabinet presenting also... really presenting two items, and that is obviously, you know, backing our stance, growth and competitiveness. Now in this regard, now the government needs to execute. They actually announced good reforms, a good set of reforms end of June. And what we now need to have is implementation and speedy implementation. And this is where the market will actually mark the government on. So there is no time for excuses. They need to implement what they announced.
Even pension reform? Even pension reform. Go through.
And I would say this is the mother of all reforms because, you know, a lot of people are talking about the Capital Markets Union. You and I discussed it for years. Actually, we are further ahead than ever before. But I think the foundation of the European Capital Markets Union is actually the domestic capital market, and the domestic capital market in Germany is the pension reform. Now I hear very confident feedback from the chancellor, but also from the vice chancellor that they will push this through, and I think it's one of the main tasks for the remaining three months of this year.
I mean, what do you see European and German businesses asking for in particular? They're kind of caught between the US and China. Is there any way that European companies can be protected whilst not breaking trade rules?
Look, next to pension reform, it's three items. We need to further work on our energy prices. You know, our underlying industries, we are heavily dependent on that. So energy is core. I think Minister Ritholtz is absolutely going into the right direction, but it remains an issue when it comes to pricing. Number two, it's everything about regulation and bureaucracy. Unfortunately, capital is fungible, and that means speed is of essence. We need faster regulation. We need faster approvals when it comes to bureaucracy. And number three, it's everything which is around, so to say, the workforce and a relaxation of certain rules in the employment market. We need to be more flexible as employers. So if you do these three things and do further reforms on that plus the pension reform, I think Germany is actually on a good way.
