Germany has €41 bln public budget gap in 2030 decarbonisation plans – industry

There is a gap of 41 billion euro in Germany’s public sector budgets over the next five years for investments and funding programmes dedicated to greening the economy, the country’s industry association BDI has warned. Germany has invested too little for decades and now faces new investment needs, said the lobby group’s head, Siegfried Russwurm. “We need to accelerate the transformation to a climate-neutral and digital country,” he added. “The financing of these and other requirements must now be clarified as a matter of urgency.” The BDI compared official targets with the budget plans at the federal, state and local government level, and concluded that public budgets lacked a total of around 400 billion euros over the next ten years, with the biggest funding gaps identified in infrastructure, education and housing.

“The analysis of public funding requirements for the climate transformation shows a mixed picture,” the industry group said. “The financing gap for the necessary climate policy measures, such as the decarbonisation of industry and the development of refuelling and charging infrastructures, is moderate at six to seven billion euros per year.” But the BDI warned that the conversion of the electricity grid, hydrogen and CO2 infrastructures, as well as new power plants, will also cost a lot of money – but were not taken into account by the BDI in the absence of key policy decisions on these issues. BDI advised against abolishing or watering down Germany’s controversial “debt brake” rules which put strict limits on new debt. “Instead, politicians must prioritise expenditure more consistently than in the past and also use funds more efficiently,” said the group.