The head of the influential Munich-based Ifo Institute, Clemens Fuest, is calling on the German government to strategically deploy the substantial public debt accumulated through the special asset fund. He argues that debt-financed investments must demonstrate economic viability to benefit future generations.
Speaking to the Süddeutsche Zeitung, Fuest emphasized that investments yielding returns exceeding interest payments would positively impact those who follow. He suggested prioritizing areas such as education and crucial infrastructure projects like railway and road networks, citing their potential to generate future returns.
However, Fuest also cautioned against poor public investments, referencing the existence of underutilized regional airports as cautionary examples. He acknowledged the concerns voiced by younger generations regarding excessive public debt, stating, “They are absolutely right.
Furthermore, Fuest highlighted the diminishing workforce in Germany and the resulting impact on the nation’s capacity to service its debt in the long term, reinforcing the need for prudent financial management.
