Germany not investing enough in education, infrastructure: IfW Kiel

BERLIN, Oct. 5 (Xinhua) -- Germany is investing too little in education and infrastructure, with around 40 percent of governmental spending going into the country's welfare system, according to the Kiel Institute for the World Economy (IfW Kiel).

"Our analysis shows that in particular the investments in education and research that are necessary for a high standard of living play only a very minor role in Germany's budgetary policy," said IfW Kiel subsidy expert Claus-Friedrich Laaser on Wednesday.

Spending on infrastructure is also comparatively "rather low," Laaser added. Therefore, the country's infrastructure is "in worrying condition," he said.

Last year, the nationwide investment backlog in school infrastructure was 45.6 billion euros (45.1 billion U.S. dollars), almost five times the annual municipal investment in school infrastructure, according to a recent study by the state-owned bank KfW.

"This pent-up demand has hardly diminished for years, not least because of the increase in the number of students and the many dilapidated buildings," Heinz-Peter Meidinger, president of the German Teachers' Association (DL), told Xinhua.

Europe's largest economy is also lacking around 100,000 teachers.

The catch-up process for investment in school infrastructure has been "made more difficult by the consequences of the current crises," said KfW chief economist Fritzi Koehler-Geib, referring to the impact of the COVID-19 pandemic and soaring energy prices.

During the pandemic, the German government provided 130 billion euros in economic aid alone, including loans to rescue major companies such as the airline Lufthansa, the country's flag carrier. Billions more were spent on supporting consumers.

In the wake of the COVID-19 crisis, subsidy policy "received a new boost," said IfW Kiel expert Laaser. However, he said that although almost 20 billion euros were declared as Coronavirus aid, this funding did not help with the "immediate economic management of the crisis at all."

To cushion the impact of skyrocketing energy prices, Germany has also unveiled aid packages for the economy and consumers totaling 95 billion euros. In addition, the government wants to provide loans of up to 200 billion euros to stabilize the economy.

"Germany must overcome the two most serious crises of the postwar era in immediate succession and, on top of that, transform its economic structure toward climate neutrality," Laaser said.

The government should "urgently review all its subsidies," he added. "More funds for education and research, infrastructure, as well as for state organs and administration are in order." (1 euro = 0.99 U.S. dollar)

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