Germany’s Scholz proposes major modernisation fund

Chancellor Olaf Scholz has proposed a €100 billion ($106 billion) investment fund to drive Germany’s modernisation as part of his campaign for the snap election on February 23.

Speaking at an SPD event in Berlin, Scholz outlined plans for the fund, which would attract both public and private investments to support energy infrastructure, housing, and other critical sectors.

Scholz also unveiled a “Made in Germany bonus,” offering a 10 per cent tax rebate on business investments, and reiterated his commitment to relaxing Germany’s strict borrowing rules, known as the “debt brake.”

“New growth only comes from more investment,” Scholz said, emphasising the need to balance modernisation with fiscal responsibility.

The chancellor criticised the conservative CDU/CSU bloc under Friedrich Merz, accusing them of failing to offer solutions for Germany’s neglected infrastructure.

Merz, leading in polls, has signalled potential openness to reforming borrowing rules but remains cautious about sweeping changes.

Despite trailing overall, Scholz has gained momentum in recent polls, narrowing the gap with Merz in head-to-head comparisons.

Meanwhile, Germany’s economic challenges, including slow growth and industrial layoffs, have added urgency to the debate over investment and fiscal policy.

Attribution: Bloomberg

Subediting: M. S. Salama