Policy Papers Notes du Cerfa

German public investment policy: between debt cap and increasing investment backlog Notes du Cerfa, n° 131, June 2016.

The German debate about public investment policyfaces a dilemma. The deficits in public infrastructure have grown considerably due to comparatively low investments in recent years. In addition, substantial investments for promising mega-projects, such as the energy transition (“Energiewende”) and broadband expansion are indispensable in a foreseeable future. 

At the same time, the discourse in Germany is dominated by fiscal paradigms that largely prohibit further public spending for investments. Otherwise, the objective of “budgetary consolidation” at the federal, state and local level sought by the so-called debt brake would be endangered. Moreover, public investment policy is more and more becoming a subject of increasing Europeanization. Outside pressure on Germany to invest more in public infrastructure is consequently growing. Against  this background, a fundamental reorientation of the entire German investment policy debate is needed.

Henrik Scheller is Scientific Assistant at the German Institut for Urbanism - Deutsches Institut für Urbanistik (Difu) in Berlin.

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Public investment infrastructures Energy transition Germany