The current German chancellor, Olaf Scholz, and his center-left Social Democratic Party (SPD), on the other hand, are pushing for big public investments to spark industrial growth. On Tuesday, Scholz proposed a €100 billion investment fund resembling the Inflation Reduction Act in the U.S. and pledged to increase the minimum wage to €15 per hour from €12.
The goal is for Germany to remain “a successful, strong industrialized country, even in 10, 20 or 30 years from now,” Scholz said.
At the same time, the SPD is calling for tax cuts for most earners and hikes on the rich, while also proposing a “Made in Germany” premium that subsidizes companies’ investments in equipment via a direct tax refund of 10 percent of the purchase price.
The Greens are proposing a “Germany fund” to finance investments in the country’s infrastructure and to bring down the electricity tax to the European minimum.
The fund, according to the party’s program, will “guarantee the younger generation a modern, functioning and climate-neutral country and a competitive economy instead of leaving them with deferred burdens and dilapidated infrastructure.”
Will any of it work?
Economists have raised questions about whether the plans are ambitious enough to confront the structural problems ailing Germany’s economy — high energy costs that are hitting energy-intensive industry and the breakdown of free trade that is core to the country’s export-oriented economy.
