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Will Germany's trillion-euro debt gamble pay off?

Dan Hirschfeld
March 13, 2025

With Germany's infrastructure crumbling and its military in shambles, the incoming coalition government plans to spend close to a trillion euros on improvements. But will the fresh borrowing boost growth or burden taxpayers for years?

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Germany's infrastructure is in dire need of investment. These decaying roads, schools, and outdated technologies are all symbolized by the collapsed Carola Bridge in Dresden. The incoming government plans to invest €500 billion ($544 billion) in transportation, energy infrastructure, digitalization, education, and research. Additionally, the German military will receive significant funding to address its outdated equipment.

To finance these investments, new debt will be incurred, raising concerns among some economists about the future burden on taxpayers. However, Marcel Fratzscher of the German Institute for Economic Research argues that Germany's low debt-to-GDP ratio means there's room for this borrowing and spending. Despite these plans, experts agree that reducing bureaucracy and improving efficiency are crucial for Germany's economic turnaround.

This video summary was created by AI from the original DW script. It was edited by a journalist before publication.