According to the OECD, Germany will avoid a recession, but has to step up the pace noticeably on the way to climate neutrality. The Organization for Economic Cooperation and Development (OECD) expects German gross domestic product to increase by 0.3 percent in 2023, followed by GDP growth of 1.3 percent in 2024. “The relaxation in the supply chains, the high order backlog and the revival in foreign demand are ensuring a gradual economic recovery,” says the report presented on Monday.
The federal government reacted quickly to secure the energy supply and to support private households and companies. At the same time, the industrialized nations organization criticizes a “large infrastructure backlog”. Also because of the need for investment for the ecological and digital transformation, it is important to increase spending efficiency, better prioritize spending and reduce tax breaks. After ten years of dynamic growth, falling unemployment and budget surpluses, the corona pandemic and the energy crisis showed that Germany had structural weaknesses and urgently needed to accelerate its ecological and digital transformation.
Germany must act decisively to promote environmentally friendly mobility. The proportion of electric vehicles in the total vehicle stock is increasing rapidly, but is still small. The federal government is still a long way from its goal of putting a total of 15 million electric vehicles on the road by 2030 and providing one million charging points: “Instead of individual measures that are primarily intended to put more environmentally friendly cars on the road, what is needed is a holistic strategy for sustainable mobility.”
According to Federal Minister of Economics Robert Habeck, the pace must be kept up with a view to achieving greenhouse gas neutrality by 2045. The Green politician insists on implementing the projects agreed in the coalition agreement. This requires contributions from all fields of action, “especially in transport”. According to the OECD, the focus should be shifted from subsidizing e-cars to expanding the charging infrastructure. It is important to strengthen competition between charging station operators.
Federal Environment Minister Steffi Lemke (Greens) said that Germany had been doing business at the expense of nature for decades – be it in the energy sector, in transport or in agriculture. “These legacy issues are costing us dearly. The OECD report shows that unequivocally.” Nature, resource and climate protection must be brought together faster and more strongly.
In order to cover the high investment requirements and at the same time maintain the sustainability of public finances, tax breaks would have to be reduced, the OECD demanded. Because these are often “distorting, regressive or environmentally harmful”. The company car privilege and the distance allowance create false incentives at the expense of sustainable modes of transport. According to the OECD, Germany should expand carbon pricing, but combine it with well-designed sector-specific regulations and subsidies.