Germany's Economy Minister Proposes Investment Fund

BERLIN (Reuters) – German Economy Minister Robert Habeck aims to boost weak growth in Europe’s largest economy with a debt-financed investment fund and budget policy changes, according to a recently released 14-page position paper.

Creating a climate-neutral modern industrial future requires massive public and private investments, which are currently hindered by Germany's stringent budget policies, the paper states.

The International Monetary Fund (IMF) recently downgraded its growth forecasts for Germany, noting that no other major industrialized nation is experiencing such a decline.

Habeck expressed concern over restrictive budgets: "There is too little leeway in the budget to enable private and public investment on a significantly larger scale than today," attributing this limitation to the constitutionally mandated spending cap.

To address this, he proposed establishing a multibillion-euro "Germany Fund" aimed at modernizing infrastructure and offering a streamlined investment premium of 10% for all firms.

The fund would particularly benefit small and medium-sized enterprises, large companies, and start-ups. The investment premium would apply against the firms' tax liabilities, ensuring that even companies without profit, like start-ups, could benefit.

Additionally, Habeck's paper supports reducing bureaucracy, expediting government processes, and increasing subsidies for climate protection initiatives.