Economists propose a 600 billion euro investment for German infrastructure enhancements.
Leading economic experts on both the employers' and unions' side are advocating for increased borrowing to upgrade outdated infrastructure. In the years to come, it's estimated that there's a need for an additional Eur 600 billion in investment.
However, meeting this amount won't be feasible with current government budgeting strategies. The condition of existing infrastructure is already affecting competitiveness and location desirability. As Michael Hüther, head of the German Economy Institute (IW) - closely linked to businesses, explained, "There's been no improvement." He mentioned rail services like Deutsche Bahn, telecommunications, and a dearth of housing as issues.
Sebastian Dullien from the Institute for Macroeconomics and Economic Research (IMK) - closely associated with unions, stressed the necessity of either restructuring the debt limit or establishing a new special fund to manage the situation. "We need to act now," mentioned Hüther. Although altering the debt brake enshrined in the Basic Law appears challenging, a special fund circumventing the same could deliver necessary planning security.
The mentioned Eur 600 billion doesn't factor in funding for businesses' sustainability transitions and their regular running costs, according to experts. The sum accounts for the "capital stock" - electricity grids, train lines, and buildings.
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- To address the investment requirements, economists suggest seeking additional financing sources, as the proposed 600 billion Euro investment for German infrastructure enhancements is beyond the current government budgeting capabilities.
- With the required EUR 600 billion in investment for infrastructure improvements, financing for businesses' sustainability transitions and regular operating costs also need to be considered, as highlighted by financial experts.
- In the process of meeting these substantial investment needs, economists like Sebastian Dullien propose the restructuring of the debt limit or establishing a special fund, emphasizing the importance of financial planning and the need for immediate action to secure Germany's infrastructure future.
Source: www.ntv.de
