B.und-Chancellor Angela Merkel (CDU) sees the need to invest immense funds in Germany and the EU in the coming years. During the German Industry Day, she emphasized that both companies and the state have a duty to do so. “We will have to spend gigantic sums in the next few years,” she said and called for more corporate investments in the high-tech area.
“But I want to be honest: There are many areas in which we can no longer get into the fore without state money,” said the Chancellor. This applies, for example, to microchip production, which is currently 40 percent more expensive in Europe than in Asia. She named battery cell production, quantum technology, artificial intelligence and cloud computing as other areas. “I want to say quite frankly: It is not that easy to find an industrial consortium to build a quantum computer,” said Merkel.
Apparently there is an expectation in the German economy that the state will have to make massive financial investments in order to cushion risks. The United States and China are now considered leaders in this field.
Laschet warns of the “Corona method”
Merkel said that the economic upturn in Germany after the pandemic was going faster than in other European countries. One advantage was the solid budget situation in recent years, which now enables help in the crisis. In the coming years, the public budgets would have to be “put back in order”, she demanded. However, that is a very difficult task.
Union Chancellor candidate Armin Laschet has warned against blocking the hoped-for economic upswing with the “Corona method” and tax increases. The “Corona method” means that you can face problems with more
state regulation react, said the CDU chairman. But now state requirements would have to be dismantled again. An important goal is to become climate neutral and at the same time to remain an industrial country.
One day after the CDU / CSU election program was presented, Laschet warned against increasing taxes because this would slow down the economic upturn. “There is no room for big tax cuts either,” he added, referring to large budget deficits. Such promises for large tax cuts are dubious in view of the financial situation. Everything else can be done without tax increases.
“It is not enough to stipulate climate neutrality by law”
Meanwhile, German industry is demanding that the framework conditions for more climate protection in companies be significantly improved. BDI President Siegfried Russwurm has not yet made any urgently necessary directional decisions. “It is not enough to stipulate climate neutrality by law.”
The state must become faster, for example in expanding the infrastructure. At present, planning and approval procedures often take many years. In the public administration there are “hair-raising” deficits in digitization, said Russwurm. Fundamental weaknesses in the location would have to be eliminated. Companies are already making decisions about production plants by 2045 – by then, Germany should produce in a climate-neutral manner according to the plans of the federal government. Russwurm also called for more public investment. “Germany is at the bottom of the list in Europe here.”
The BDI is more optimistic about the economic development in Germany. He now expects the gross domestic product to increase by 3.5 percent in the current year. So far, an increase of 3.0 percent had been assumed. The BDI expects an upturn in the domestic economy due to catch-up effects in private consumption and stronger international business, driven by Asia and the United States.
However, delivery bottlenecks and raw material shortages endangered the economic recovery. However, the number one risk remains the further development of the pandemic. Economic output in Germany collapsed last year.