Germany needs 400 billion euros for infrastructure
Published: Thursday, Oct 24th 2024, 12:20
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Germany has some catching up to do when it comes to infrastructure - as the recent collapse of the Carola Bridge in Dresden showed. A new study by renowned economist Lars Feld now puts the funds required for highways, railroads and energy infrastructure alone at around 400 billion euros in the coming years.
According to the analysis, which was presented in Frankfurt on Thursday, the total demand is likely to be even higher. This is because infrastructure investments in Germany are not systematically recorded.
"Germany's infrastructure is almost entirely dependent on its substance," said Feld, who teaches at the University of Freiburg and advises Finance Minister Christian Lindner, commenting on the study commissioned by fund provider Union Investment. "For a long time now, state investment has no longer been sufficient to secure its existence."
Hans Joachim Reinke, CEO of Union Investment, emphasized that a functioning infrastructure is the basis for a growing economy and prosperity in Germany.
Investments below the international average
Based on information from the German Ministry of Transport, the study estimates the investment requirement for the federal road infrastructure alone - i.e. freeways and federal trunk roads - at over 57 billion euros for the years 2025 to 2028.
For the railroads, 63 billion euros would be needed in this period. And for the energy infrastructure, the estimated long-term investment requirement for onshore and offshore facilities as part of the energy transition is up to 270 billion euros.
At the same time, Germany has some catching up to do: in 2022, the investment ratio of the federal, state and local governments together amounted to 2.6% of real gross domestic product. This puts Germany around one percentage point below the average for OECD countries.
©Keystone/SDA
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