Germany Must Invest More in Its Future

Shortly before the parliamentary election in 2013, Germany is riding on a wave of euphoria: hardly any other euro country has weathered the financial and debt crisis so well. Since 2009, GDP has grown by over eight percent and 1.2 million new jobs have been created. Public finances were consolidated and, in 2012, there was a fiscal surplus of 0.2 percent of GDP. An impressive financial position indeed for a country that, only ten years ago, was considered the "sick man of Europe." But it is also a deceptive one. If one substitutes these for other comparative figures, then this image is seriously tarnished. Since 1999, Germany has achieved lower economic growth than the rest of the euro area. Real wages have barely increased since 1999 and real consumer spending has grown much more in the euro area on average than in Germany. In addition, German net public assets have contracted significantly. In 1999, net state assets were about 20 percent of GDP and, by 2011, they had declined to 0.5 percent of GDP and are, therefore, no longer available for future generations. In many areas, Germany has not really progressed at all and in some areas it has fallen significantly behind other countries. These arrears have not been balanced out by recent positive developments.