<abstract xmlns="http://www.w3.org/1999/xhtml">
<p>Germany’s manufacturing sector still shows gross fixed capital formation below pre-coronavirus levels and has been stuck in a recessionary trend since 2018. The advantages of German industry are at risk. Therefore, the federal government has to i) ensure that time is bridged and companies are supported until cheap energy is available, ii) improve investment conditions, iii) eliminate locational disadvantages (tax burdens, energy costs) and strengthen advantages (R&amp;D, human capital) and iv) reduce bureaucratic costs. There is need for tax and growth policy reform. In this regard, the debt brake turns also acts as an effective brake on tax cuts and is thus questionable in terms of growth policy.</p>
</abstract>

Germany’s manufacturing sector still shows gross fixed capital formation below pre-coronavirus levels and has been stuck in a recessionary trend since 2018. The advantages of German industry are at risk. Therefore, the federal government has to i) ensure that time is bridged and companies are supported until cheap energy is available, ii) improve investment conditions, iii) eliminate locational disadvantages (tax burdens, energy costs) and strengthen advantages (R&D, human capital) and iv) reduce bureaucratic costs. There is need for tax and growth policy reform. In this regard, the debt brake turns also acts as an effective brake on tax cuts and is thus questionable in terms of growth policy.

Opportunities for More Growth Through Bold Fiscal and Financial Policies

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Chancen für mehr Wachstum durch eine mutige Steuer- und Finanzpolitik

Germany’s manufacturing sector still shows gross fixed capital formation below pre-coronavirus levels and has been stuck in a recessionary trend since 2018....

Opportunities for More Growth Through Bold Fiscal and Financial Policies

Published Online: Oct 26, 2023

Page range: 660 - 664

DOI: https://doi.org/10.2478/wd-2023-0185

© 2023 Michael Hüther, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.