Modernization thrust into the future

A study by the German Economic Institute and the Macroeconomics and Economic Research Institute estimated the need for additional public investment and subsidies in 2019 at about 457 billion euros over ten years. Of these, 158 are for municipal infrastructure, 109 for education, 15 for housing, 100 for interregional infrastructure and 75 for decarbonization of industry. In addition, additional budgetary resources must be made available at national and European level for the transformation of the economy in accordance with the requirements of the Climate Change Act and for the strengthening of digital competitiveness and sovereignty. This alone should make this estimate of 457 billion euros a lower limit.

In the fields of the "double transformation" (climate protection and digitalisation), the requirements for new products, processes and business models have risen sharply. With considerable investment in the public and private sectors, Germany would hold its own in international competition, secure employment in industry and successfully master structural change. The additional public investment of at least 20 billion euros per year over the next decade could address deficits in municipal infrastructure as well as strengthen inter-regional transport and telecommunications infrastructure, house building and the education system. This would end the ongoing phase of "underinvestment" in the public sector over the past 15 years. Further investments in e-government, the digitalisation of education and emission reductions in public buildings and vehicle fleets are essential to make Germany fit for the future. After all, prosperity and competitiveness essentially depend on an efficient infrastructure and a good supply of public goods.

What needs to be done?

• Politically codify: The investment and modernisation programme must find its way into the agreement of a future federal government coalition, government coalition.
• Budgetize: The federal government should create the prerequisites under budgetary law (cash funds and commitment appropriations) in the 2022 federal budget and financial plan up to 2025.
• Break down barriers: Financial and bureaucratic barriers to the implementation of a successful investment offensive in the public and private sectors must be comprehensively addressed in the next legislative period. Especially in the municipalities: Creation of the (constitutional) legal conditions to be able to promote municipal and educational investment. As well as in the procedures: Creation of capacities for / and acceleration of / for planning and approval procedures and their acceleration.