The persistent inadequacies in Germany’s infrastructure are prompting calls for fundamental reform, with the President of the Ifo Institute, Clemens Fuest, arguing that financial injections alone are insufficient to address the systemic issues. While the government’s recent allocation of special debt funds aims to bolster infrastructure projects, Fuest contends that these will fail to resolve the deeper problem: the consistent prioritization of new construction over essential maintenance.
“Simply throwing money at the problem will not fix it” Fuest stated, emphasizing the need for a comprehensive overhaul of budgetary processes. He suggests that the tendency to neglect ongoing upkeep within the political arena continues to undermine the long-term viability of core infrastructure.
Drawing parallels with international models, Fuest proposes exploring alternative funding mechanisms, specifically advocating for a system akin to that employed by Austria’s Asfinag. This organization, which manages Austrian highways, generates revenue directly tied to traffic volume, affording it greater financial autonomy and enabling independent borrowing capabilities. “The Austrian model creates a high degree of planning certainty for all stakeholders and reduces dependence on annual budget debates” Fuest noted, highlighting its potential benefits for Germany.
The proposal is likely to reignite debate surrounding privatization and the role of the state in infrastructure management. While proponents argue such models improve efficiency and deliver greater accountability, critics warn of potential social and environmental consequences if profit motives are prioritized over public service. The Ifo Institute’s intervention adds considerable weight to the call for change, placing pressure on policymakers to move beyond short-term financial fixes and to consider more innovative and structurally sound solutions to secure Germany’s infrastructure for the future. The core question now becomes whether the political will exists to challenge entrenched budgetary practices and embrace potentially controversial reforms.