Allianz SE Chief Executive Officer (CEO) and Chairman Oliver Bate warned on Tuesday that Germany has "a spending problem" because it spends more on consumption and less on investment, suggesting that a substantial change is needed.

Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Bate said that Germany was failing "the working class to deliver them the most important basic goods," like functional transportation and education.

Additionally, he noted that there are no changes that are not painful and urged German authorities to find a way to balance between bringing in necessary changes and the people's "hope."