Technological sovereignty in Germany is part of a strategy to reduce risks arising from economic dependencies, KfW said.

KfW is a German development bank that plays a key role in financing economic and social projects in Germany and around the world.

The German federal government, together with other European Union countries, has been working for years to strengthen technology throughout Europe. 

In this context, they have launched several important projects to improve key technologies. 

In addition, with the European Chip Act, the government is making a major effort to increase semiconductor research, development and production in Germany.

Technological sovereignty

On the other hand, to better protect the German and European economies, the government is changing its trade policy, according to KfW.

This includes, for example, reforms in the World Trade Organization (WTO), trade agreements with high environmental and social standards, and investment protection. 

In fact, the German government considers successful negotiations with the MERCOSUR countries, as well as with India, Indonesia, Thailand, Mexico and Australia, to be very important.

Challenges

KfW referred that the Russian invasion of Ukraine has shown the need for the European Union and its Member States to adapt their economic and financial policies to the new geopolitical reality. 

It has also highlighted the importance of reducing the risks associated with economic dependencies.

In response, the federal government is taking steps to improve labor supply. 

For example, it is making Germany more attractive to skilled workers from abroad. 

At the same time, the government wants to make better use of domestic potential. 

To this end, it is focusing its efforts on employing unemployed people and improving employment incentives and opportunities, especially for the elderly and those seeking additional income.

In addition, to promote efficient capital allocation and stimulate investment, it is necessary to strengthen capital markets and improve financing conditions. 

For this reason, the Federal Government supports the creation of a Capital Markets Union in the European Union. 

It is also working to make Germany a more attractive place for investors, entrepreneurs and innovative start-ups. To this end, it has implemented the Future Financing Act (Zukunftsfinanzierungsgesetz), which aims to improve financing conditions and contribute to the future development of companies.