In view of the partly dilapidated infrastructure and the fight against climate change, experts see an immense need for investment in Germany. In the next ten years, an additional 600 billion euros would have to be raised – this is the result of a study by the employer-related Institute of German Economics (IW) and the trade union-related Institute for Macroeconomics and Business Cycle Research (IMK).
The study appears at a time when the federal government is currently in difficult negotiations about the federal budget for 2025.
The FDP insists that the debt brake anchored in the Basic Law is adhered to. This only provides for new debts to a limited extent. IMK director Sebastian Dullien calls for a reform of the debt brake. Because of the investment backlog, “ideological blinders” must be removed and bold and decisive measures are necessary. IW director Michael Hüther said Germany faces an enormous challenge in renovating and modernizing the infrastructure and in the climate-neutral transformation. “We really need to jump here.”
Finance Minister Christian Lindner (FDP) said that the federal government’s public investments could be realized in the next ten years. “The prerequisite is a new setting of priorities in the budget. Inefficient subsidies, redistribution, disincentives in the labor market and the interest burden on national debt are still slowing us down. We have made progress in the budget transition, which we now have to expand on,” said Lindner.
The scientists estimate around 200 billion euros alone over ten years for public investments in climate protection, for example for energy-efficient building renovations or grid expansion for electricity and hydrogen. Around 127 billion euros should also flow into transport routes, including almost 60 billion euros for the modernization of the rail network.
Even if the amount of almost 600 billion euros over ten years seems gigantic: in relation to Germany’s economic output, the additional financial requirement of around 60 billion euros annually or around 1.4 percent of the annual gross domestic product is a manageable amount, according to the institutes. The debt brake could be supplemented by a “Golden Rule” – this would exempt investments from the current limit on new debt. A potentially more “politically acceptable” alternative is a large-volume infrastructure fund.