Infrastructure deficiencies are paralysing Germany. But as a result of the Schuldenbremse (debt brake), urgently needed investments – including to boost climate protection – are to be postponed. This is both risky and economically short-sighted. The debt brake is threatening to become a brake on the future.
The upcoming 2025 budget is currently the subject of heated debate within the governing coalition. Federal Finance Minister Christian Lindner wants to impose cuts to the tune of tens of billions of euros on federal ministries, while at the same time refusing to discuss options to generate additional government revenue or legislative measures to expand the financial framework. By blocking the future-proofing of the debt brake, he is jeopardising the freedom, security, and prosperity of us all.
In January 2024’s edition of this column, I argued that the debt brake must not simply become a brake on investment. (This was also the subject of our lunchtime discussion “What do we owe the future?” (“Was schulden wir der Zukunft?”) in February.) Reliable and sufficient funding must be secured for urgently needed government spending. This issue is still highly topical, with a second lunchtime discussion on the prospects of a European investment offensive taking place today.
However, there is a sizeable gap between what needs to be done and what Germany is actually doing.
Virtually all experts and political parties agree that, especially in times of crisis, governments must act wisely and with foresight. Likewise, there is a broad consensus that countries can only remain functional and competitive if their infrastructure is in good working order. This includes schools, railways, and power grids, as well as heat provision, hydrogen pipelines, and connectors, to name but a few. In recent years, however, no EU country has invested as little in its public infrastructure (as a percentage of GDP) as Germany. From 2000 to 2020, the EU average was around 3.7 percent of GDP per year, while the German average for the same period lay at 2.1 percent.
And it’s not just infrastructure deficiencies that are paralysing the country. There is also a lack of qualified personnel, in particular emerging young talent and skilled labour in key professions. What's more, there is a lack of genuine, broad-based support among small and medium-sized enterprises for the transformation of the German economy towards climate neutrality. To achieve this would require significantly more investment and new funding instruments, ideally coordinated at European level.
However, with their refusal to recalibrate the debt brake in spite of urgent calls from a majority of economic experts, the Federal Minister of Finance and his Free Democratic Party more broadly are blocking the urgently needed repair and forward-looking reconstruction of German infrastructure. Only debt-break reform would make this possible; the country’s municipalities and regions, for their part, simply don’t have the funds to spare. The debt brake has become a brake on investment – and a brake on the future.
And Lindner doesn’t seem to be stopping here. Even measures aimed at cushioning inflation at home have made it onto his cut list, as has funding for civilian crisis prevention abroad. The axe is being laid to instruments whose weakening will jeopardise democratic cohesion and security in Germany.
A word on security: During discussions on the 2025 budget, SPD parliamentary group deputy chair Achim Post recently stated that, for the SPD, it is important “not to play internal security, external security, and social security off against each other”. That is the right approach, but something crucial is missing. Germany’s National Security Strategy, presented almost a year ago, clearly recognises that our country’s security is inseparable from the security of our natural resources. Climate protection means security.
Are we behaving as if this was the case? We are not. While the Bundeswehr Special Fund [to boost German defence capabilities] attracted a consensus, a Special Fund for Climate Protection has so far failed to do the same. This, even though money spent on climate protection, put simply, will stop us from baking to death and make sure that we have access to sufficient water – for drinking, for the economy, and for agriculture, which secures our food supply. It doesn’t have to be love for the planet that drives us to prevent the horror scenarios threatened by climate change – but at least let us do so out of sensible economic foresight. The cost of inaction will be many times higher. Sven-Christian Kindler, the Greens’ budget policy spokesperson, put it in a nutshell in an intensive discussion on Deutschlandfunk at the end of April: “We will not be able to maintain our prosperity if we continue to destroy the natural resources on which our lives and livelihoods depend worldwide.”
SPD Chancellor Olaf Scholz must finally make clear to his finance minister that the debt break has to be adjusted. If this fails to materialise, Germany’s future security, prosperity, and freedom cannot be guaranteed.
böll.column
Get involved! There’s no other way to be real – thus the message of Heinrich Böll, and, to this day, his encouragement is inspiring us. With this column the Presidents of the Foundation involve themselves in current social and political debates. This column will appear each month, authored, in turn, by Jan Philipp Albrecht and Imme Scholz.
This article first appeared here: www.boell.de