A view behind the diplomatic formulations of the European Commission is sending a clear message: Germanys budget consolidation is progressing successfully.
The focus shifts from urgent problems of the crisis towards improved conditions for sustainable growth and employment.
Berlin, 19 June, 2014.
The Commission recommends more public investments in infrastructur and education.
It criticises the pension plans of the Federal Government and advocates to provide an incentive for a late retirement.
It also warns to monitor the impact on the employment.
All those topics are very important for the German economy as well.
The European Commission considers Germany to be basically on the right track.
The economic growth in Germany is increasing, partly because of the high domestic demand.
The employment is increasing and the budget consolidation is progressing with a planned decrease of the gross debt to 76 percent of the GDP in 2014.
The Federation alone will be earning over 40 billion euros more than estimated in the last year.
Due to the healthy flow of tax revenue, additional scopes are absolutely necessary for the economy.
However, according to the European Commission there are substantial deficits for future investments.
Only 7 percent of public spendings flow towards investments, 93 percent are states consumption.
Brussels analysts rightly admonish the Federal Government to invest more money into expanding and preserving transport routes, public buildings and supply networks and increasing the budget for education.
From a business point of view, restoring and expanding the transport routes of Germany alone would require the budget to be increased by five billion euros annually and not for the whole legislative period like it was planned in the coalition agreement.
There are also further efforts necessary to improve the balance of family and career: The quality of child care facilities has to be improved and the expansion of all-day schools developed further.
July 2014
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