By Cornelius Matthes, CEO of Dii Desert Energy and the MENA Hydrogen Alliance
Driven by recent geopolitical developments, the German parliament on 19th March probably had the most important vote since German reunification, also in an unprecedented step before the newly elected parliament will be convened (as two extremist parties will have a one third blocking minority).
It was really interesting to be at the Berlin Energy Transition Dialogue and see the two outgoing ministers arriving in the Federal Foreign office and give their speeches, after this historic vote.
So what was the vote about: the vote was to reform the ‘debt brake’, enshrined in the German constitution after the financial crisis. A step with huge implications, as you could also see from the massive yield increase in Bunds (German 10 year bonds) once this became clear. The agreement now foresees a fund up to possibly even more than 1tn EUR to modernize Germany with infrastructure, defence, digitization etc – and importantly also up to EUR 100bn for the energy transformation.
A lot is at stake here. Germany is among the very global countries still holding a AAA rating and the economy needs to come back on track, after poor performance already over around 10 years.
It is not so much about the money, it is about how the money is spent! In this sense, Germany has accumulated a lot of problems, a massive increase in bureaucracy, too many public servants with low service and output.
Hence, the big hope is that Germany will spend this astronomical amount of money wisely, decrease the % of state and reduce the number of public employees, while massively reducing bureaucracy, accelerating permitting processes also for RE, invest in the right infrastructure we need and not create investment ruins and crowding our private sector.
Let us be hopeful that this is a wake up call and will catapult Germany back on track and also help to make Europe stronger in these crucial times.
We need a new and sustainable ‘Wirtschaftswunder.’