Chancellor Friedrich Merz has announced that the draft Investment Protection Act is complete. “This sends an important signal. It is therefore all the more baffling that there is apparently still a dispute over compensation rates of 80 or 100 per cent of the market value,” says Dirk Wohltorf, President of the German Real Estate Association (IVD) and Chairman of the Federal Working Group for the German Real Estate Industry (BID).
The BID is calling for compensation amounting to the full market value, to be paid immediately and in cash. However, the BID does not see any compelling need to lay down a specific percentage for this in law. What is crucial is that, ultimately, full, reliable and legally secure compensation is guaranteed.
“Anyone who argues over 80 or 100 per cent, when what is really at stake is 100 per cent trust, has failed to grasp the crux of the problem,” says Wohltorf. “The protection of property is not a bargaining chip to be haggled over as if at a bazaar. Above all, this issue must not become part of a wider political trade-off, in which investment protection is weighed up against concessions in entirely different policy areas. For this law is about far more than just percentages. It is about the credibility of government commitments, about legal certainty and, above all, about investors’ confidence in Germany as a business location.”
This trust is already under considerable strain. Anyone wishing to mobilise private investment in housing must, at the same time, ensure that no doubts arise regarding the protection of private property. The Federal Government must therefore not allow the actual aim of the bill to be lost in the petty squabbling of coalition politics.
“Germany now needs a clear commitment to the protection of private property, not yet another round of bargaining over percentage points,” demands Wohltorf. “The Investment Protection Act must be brought forward swiftly. Any further delay sends the wrong signal to those who are supposed to invest, build and create jobs in Germany.”
