Merkel’s Government under pressure to invest in view of record €13.5bn surplus

14th January 2020

Critics argue that Germany’s ailing infrastructure is badly in need of investment.

German Chancellor Angela Merkel is under increasing pressure to spend some of the Government’s record €13.5bn surplus on tax cuts and investment in Germany’s increasingly outdated infrastructure.

Despite several news reports showing weakening economic growth, best underscored by weak booking orders for Germany’s mammoth manufacturing sector, the Government managed a surplus of €13.5bn of income over expenditure by the end of 2019. This has mainly been attributed to an increase in tax revenues and a low interest rate.

On Tuesday, a headline by Germany newspaper Bild read “Chancellor, Hand Out the Money!”. A number of economists, commentators and pressure groups have criticised the Government over what is described as an ‘obsession’ with balancing the books despite much-needed infrastructure projects across the country.

Ms Merkel had, when campaigning to become chancellor 15 years ago, once promised to reform taxation laws and relieve the Germany taxpayer. A Bild editorial stressed that in her 5,167 days in office, the tax burden has increased rather than decreased.

On Tuesday, the German Government signed an investment deal with the national rail network, Deutsche Bahn, where the state will contribute €62bn while the company will contribute €24bn.

Critics argue that the announced investment is a case of too little too late.

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