In the face of constitutional changes and planned billion-dollar investments in infrastructure, the former Haushaltsstaatssekretär Wolf Heinrich Reuter sees an enormous need for more planning experts in administrations.
“Approval procedures have been a problem for a long time in investments” said Reuter to the partner newspapers of the “New Berlin Editorial Association” (Friday editions). Although the government has made progress through various initiatives, particularly on the state level, “the problem is not solved” he said. Reuter was initially the head of the principles department under former Finance Minister Christian Lindner (FDP) before serving as a state secretary from January to November 2024.
Moreover, the tight labor market, particularly the capacity shortage in the construction sector, could have a negative impact, Reuter said. “The builder can either repair a public road or let his employees build a factory.” The state could invest more, but at the same time, it could brake private investments.
Reuter also warned of the financial consequences of the two-billion-euro package agreed upon by the Union, SPD and the Greens. “If we assume an additional debt of around two trillion euros over the next 12 years and an interest rate of 2.5 percent, the total interest payments over the years would amount to approximately 350 billion euros, roughly a doubling of the interest burden within 12 years” said the economist and computer scientist. If one were to calculate more pessimistically with an interest rate increase to four percent, the interest burden would rise to 550 billion euros. “The effects of an interest rate increase on existing debt have not yet been taken into account” Reuter warned. Ultimately, these funds would be missing elsewhere.