Joachim Nagel: German economy - rising to the challenges

Speech by Dr Joachim Nagel, President of the Deutsche Bundesbank, at the invitation of the German association of family businesses, Frankfurt am Main, 24 September 2024. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Check against delivery 

1 Introduction

Ladies and gentlemen,

I am delighted to be able to speak before you today, as representatives of Hessian family businesses. Family businesses play a significant role for the German economy and German society.

In cooperation with the audit firm EY, the University of St. Gallen in Switzerland compiles the Global Family Business Index. It lists the 500 largest family businesses in the world. And, last year, 78 businesses on this list – nearly 16% – were located in Germany. This puts Germany in second place behind the United States, which, however, has nearly five times the GDP of Germany. According to EY data, these 78 businesses generated the equivalent of just over €1 trillion in revenues in 2023. Germany's share of total revenues is therefore just over 10%. And, let it be noted, these are merely the largest and highest-revenue family enterprises.

However, when we talk about family businesses, it is naturally not just numbers that come to mind. It's about much more than that, not least about tradition. What I often hear in this context is that "family businesses think in terms of generations, not quarterly reports". For me, staying power is a good and important quality to have in order to comprehensively rise to challenges and overcome them sustainably. And we are currently facing our share of challenges; of that there is no doubt. I am referring to macroeconomic challenges, which also matter to family businesses.

Once a year, the Society for the German Language (Gesellschaft für die deutsche Sprache) chooses several terms as "Words of the Year". Krisenmodus – "crisis mode" – took first place last year. The term Krisenmodus will probably ring a bell if you look back across the past few years: the COVID-19 pandemic, disintegrating supply chains, high energy prices. This has also left its mark on economic growth, which, this year, will remain weak as well.