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German investment spending pledge not likely to satisfy infrastructure hawks

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German investment spending pledge not likely to satisfy infrastructure hawks

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The German government has promised an addition 10 billion euros in investment spending between 2016 and 2018.

Finance Minister Wolfgang Schaeuble revealed the figure while announcing new tax estimates for the next four years.

He also said Germany’s economy should keep growing as long as geopolitical risks do not deteriorate further and that a balanced budget, with no borrowing, remains achievable next year.

However, the extra 10 billion falls far short of what the mayors of German cities say is needed to upgrade public infrastructure. They have called for 118 billion euros of investment on roads and buildings.

The DIW economic think-tank estimates Germany needs to invest an additional 80 billion euros to reach OECD average levels and another German public committee has called for investments of 7.2 billion euros a year to fix public transport infrastructure.

It is also unlikely to satisfy international calls for Berlin to invest more to help boost growth in the eurozone.

The International Monetary Fund has said that Germany could spend more and still achieve Schaeuble’s long cherished goal of a balanced budget.

with Reuters