(Bloomberg) — Chancellor Olaf Scholz proposed setting up an investment fund worth at least €100 billion ($106 billion) to help pay for the modernization of German infrastructure.
In a speech Saturday at a campaign event in Berlin, Scholz said establishing such an entity, which would include both public and private cash and could later be topped up, would be possible immediately and wouldn’t require any changes to Germany’s constitution.
The money could be used for investment in areas such as energy infrastructure or home construction, Scholz told delegates from his Social Democratic Party. He also pledged to introduce a tax rebate for companies of 10% of the value of investments in Europe’s biggest economy, calling it a “Made in Germany bonus.”
“Germany’s future must not be ruined by excessive saving,” Scholz said. “On the contrary, new growth only comes from more investment.”
Germany is heading to the polls on Feb. 23 after Scholz this month dismantled his three-party coalition with the Greens and the Free Democrats due to a prolonged dispute with the fiscally hawkish FDP over government borrowing.
The chancellor’s surprise move pitched Germany into political turmoil at a time when its economy is barely growing and major manufacturing companies are laying off thousands of workers and considering factory closures.
Scholz is staying on in a minority government with the Greens until parliament is dissolved ahead of the election. Without a majority in the lower house, he’s unlikely to get any major bills approved.
–With assistance from Arno Schütze.
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