Talking point
Rail transport: Investment in the network is required to further boost competition
The opening of the rail transport market has helped to significantly boost the share of non-federally owned railways in regional passenger transport (2013: 26.4%) and freight transport (33.2%). Performance in these two segments has increased in recent years, too. The factors necessary to enable a continuation of this trend are higher investment in rail infrastructure and dependably predictable grants for regional transport. [more]
Focus Germany
Focus Germany: Ice bucket challenge and structural investment gap
German GDP only 1 ½% in 2014, considerable risks for 2015. We have scaled back our GDP forecast for 2014 from 1.8% to 1 ½%, as we now expect weaker growth in H2. This also reduces our forecast for 2015 from 2.0% to 1.8%. The risks that this still constitutes an overly optimistic forecast have increased significantly. The German investment cycle will likely be more subdued than expected due to the ongoing weakness of world trade and increasing geopolitical strains. Even the hitherto still robust private consumption is emitting its first warning signs. [more]
Germany
Progress needs broadband: Private investment requires more government stimuli
Besides transport and energy infrastructure, communications infrastructure is steadily gaining in importance in the regional competition to attract investment. One source of concern in particular though is the significant gulf in investment both between west German and east German federal states as well as between urban and rural regions. This is compounded by the problem that there is usually no viable business model for projects in rural areas without government subsidies. As there is no such thing as a standard blueprint for the broadband rollout with its huge investment requirements, every single project with its specific local features needs to undergo a critical economic feasibility analysis. On this basis, efforts should be taken to work out the best rollout model in terms of technology, funding and time horizon, respectively. In essence, the broadband rollout in Germany requires more government stimuli to foster private investment, but these efforts need to be coordinated and based on sound judgement. [more]
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