German Finance Minister Wolfgang Schaeuble said Sunday that criticism of his country's record on investment was "justifiable" but warned it must not be financed by public debt.
Berlin has faced calls from Paris, Rome, the International Monetary Fund and others to invest more to help spur growth in Europe.
Germany has presented a balanced federal budget for 2015, the first in 45 years, and has defied the growing calls for a policy U-turn amid data pointing to a worsening economic outlook for the eurozone economy.
"We must invest more and improve our competitiveness," Schaeuble said in an interview with the Welt am Sonntag newspaper.
"We have to get to it -- and soon and concretely. The criticism of us there is completely justifiable."
"Only we don't want growth on credit," he warned.
Schaeuble said Germany was working nationally and at the European level on more investment but warned it took time and did not happen overnight.