Public investment: debt reduced despite increase in spending

Germany has some scope for public investment without violating the debt brake. In total, the federal government and municipal authorities could undertake additional investments in the region of EUR 150 billion (about 5 % of GDP) in the years ahead, if the government were to abandon budget surpluses that are not required by the constitution. The main arguments in favour of such a move are the fact that Germany trails most other industrialised countries in terms of public investment, the low interest rates and demand for safe forms of investment for retirement provisions.

KfW-Investment Barometer Germany – Q2 2014(PDF, 144 KB, non-accessible)