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Opinion
Guntram Wolff

Germany’s Government Still Has an Allergy to Investing

The new coalition budget looks a lot like the old German coalition budget. 

Spending has to keep up with growth.

Spending has to keep up with growth.

Photographer: Patrik Stollarz/Getty Images Europe

Germany’s new government is composed of the same two parties as its previous one, but many in Germany and outside expected one major change: more government spending. Olaf Scholz, the new finance minister, comes from the Social Democratic Party, which heavily campaigned on a promise of more investment and growth in Germany.

And yet Scholz’s first budget suggests those hopes were misplaced: The Scholz plan looks almost identical to that of the previous minister, Christian Democrat Wolfgang Schaeuble. Despite the change at the top of the powerful finance ministry, compare the two budgets (see chart below) and it’s hard to find any substantial difference in the investment picture. That's a worry for Germans, but also Europeans more broadly.