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Germany needs to significantly increase investment: experts
[BERLIN] Germany is not investing anywhere near enough and its public and private sector must boost spending to ensure Europe's largest economy continues to grow and create jobs, a panel of experts said on Monday.
Marcel Fratzscher, head of the Berlin-based DIW economic institute, said the 21-member panel convened by Economy Minister Sigmar Gabriel to come up with a range of investment options had concluded that Germany was suffering from very weak investment.
"We agree the huge investment problem needs to be solved to make our country fit for the future and to ensure prosperity in the long-term," Mr Fratzscher, the commission's chairman, said.
While the report did not specify how big the investment gap is, Mr Fratzscher told Bild newspaper the government and companies were currently investing around 100 billion euros too little per year, with most of that backlog being in the private sector.
Germany has also come under international pressure to boost spending to help stimulate economic growth across Europe.
Mr Gabriel said the commission's work was "excellent" and that the government would examine the recommendations. The report is due to be presented to the government on April 21.
In transport alone, investment is between 7-10 billion euros too low, Mr Fratzscher told reporters, adding that this was an urgent task which would become costlier the longer the government waited.
The commission - made up of representatives from the finance industry, firms, trade unions and economists - suggested that alongside upping public spending, the government could create new instruments to mobilise private funds to repair old roads and build new ones, for example. It suggested creating a citizens' fund to get savers involved in such projects.
Mr Fratzscher said Berlin had the leeway to invest more without violating its "balanced budget" policy. Germany achieved the so-called "schwarze Null" (black zero) one year early in 2014.
The head of Germany's DGB federation of trade unions, Reiner Hoffmann - another panel member - said Berlin could afford to spend more even if this increased government debt.
The commission suggested investing in broadband networks and digital services such as in health and education, as well as spending more on energy systems such as grid infrastructure, energy efficiency and storage technologies.
It suggested supporting new companies by removing red tape and tax obstacles and called for investment in training and helping more women to work by improving childcare facilities.
In the long-term, the panel wants to look at the possibility of creating a public infrastructure financing corporation for federal highways which would be financed by user fees and would be able to borrow on the markets without a sovereign guarantee.