Germany’s latest budget has been accused of undermining both Germany’s economic prospects and the Eurozone’s stability . The first criticism is correct; the second is misguided.
The proposed budget cuts public investment to reduce Germany’s debt to GDP ratio while allowing for increased social spending. The reduction in investment is a serious mistake, as a number of German economists have been quick to point out . Germany needs to step up its investment in both physical and digital infrastructure to boost potential output—especially given the German government’s well-placed emphasis on its Industry 4.0 strategy .
Cutting public investment risks undermining the […]
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