- Relieving the burden on the Länder and municipalities
By providing financial relief of approx. €45 billion for municipalities and the Länder in the 2013-2018 period, not least for child care services, schools, higher education institutions and urban planning, the Federal Government is playing a major part in ensuring that planned investment projects can be implemented – despite the challenges in these areas. The measures include financial assistance to promote investment by financially weak municipalities totalling €3.5 billion.
- Supporting municipal investment projects
In order to ensure a high quality of municipal infrastructure, the funding available for investment projects must be used as effectively and economically as possible. The large number and varying nature of municipal construction projects necessitates administrative skills and capacities which are not adequately available in-house to all municipalities. It therefore makes sense to bring together the requisite capacities and skills on an overarching basis and to make them available to municipal administrations as needed. By the end of 2016, the Federal Government will restructure the consultancy firm for public-private partnerships (ÖPP Deutschland AG) and revamp its strategy. The new company is to provide the public sector – and particularly the municipalities – with a nation-wide advisory service. It will no longer focus solely on public-private partnerships, but will assist all types of procurement projects. The aim is to pool expertise for the purpose of assisting local authorities that need help in planning and carrying out investment projects, thereby enabling them to implement such projects as cost-effectively as possible.
- Investing more in research and development
The Federal Government is investing an additional € 3 billion in research and development during this legislative term, mainly to finance the excellence initiative and the Pact for Research and Innovation. In this way, it is helping to safeguard Germany’s position as an internationally competitive base for innovation and technology. Further investment priorities include efficient supra-regional transport routes, more efficient use of energy, and combating climate change. In the 2014-2017 period, an additional €5 billion is available for the transport sector, and between 2016 and 2018 a further €10 billion is allocated in particular for infrastructure (of which another amount of nearly €3.1 billion is to be invested in the transport sector), energy efficiency and combating climate change.
- Supporting Europe’s investment campaign
Germany will also substantially support the European investment campaign and provide approximately €8 billion via the KfW to finance projects under the European Fund for Strategic Investments (EFSI), which was launched in November 2014.
Nearly 90% of all investment in Germany is private investment. The Federal Government is not only strengthening public investment, but has also taken further steps to put a pro-growth investment climate in place.
- For example, the has improved the rules governing the and the ongoing expansion of renewables. Also, it has been possible to interrupt the cost dynamism of recent years and also to make it easier for stakeholders to plan for the development of energy prices.
- The 2014-2017 Digital Agenda is to boost participation in the digital world and make even better use of its innovative potential. Via the Guidelines for Broadband Funding, the Federal Government is providing a total of €2.7 billion to fund the expansion of broadband. By 2018, nation-wide high-speed networks offering transmission rates of at least 50 megabits per second are to be in place.
- With a view to facilitating access to venture capital for innovative start-ups, the Federal Government adopted measures in September 2015 to improve the policy environment for venture capital and start-ups in Germany. Here, the extension of the successful INVEST grant programme is an important component. Overall, public funding totalling about €2 billion is available for all venture capital funding measures, including the various ERP programmes.
- In order to give companies greater scope in which to act, the Federal Government is continuing to reduce red tape. Overall, the compliance costs for business in 2015 were reduced on balance – i.e. taking the overall view of increases and reductions in burdens contained in all Federal Government legislation in that period – by approximately €1.4 billion. The Bureaucracy Cost Index dropped below its initial level of 100 (2012) for the first time last year, and ended 2015 at 99.1.
The Economic Affairs Ministry is examining other ways to strengthen macroeconomic investment dynamism. One aspect is improving the environment for private-sector investment and removing barriers to investment. Another is developing concepts on financing the future maintenance and expansion of public infrastructure. Private-sector capital is also to be mobilised for this. At the same time, it is necessary to identify the areas in which specific measures can improve the provision of infrastructure, particularly at local level. These considerations will draw on the experience and expertise of the decision-makers on the ground.