Deficit is in state investment

Although its relatively small share of
total investment means that it cannot explain the whole
investment gap vis-à-vis the Eurozone, state investment
is nonetheless central to the economy as a whole, which
depends on functioning public infrastructure.

Because of an erroneous budget consolidation policy, public
infrastructure has been deteriorating steadily since
2003. And because expenditure on infrastructure has
a particularly large multiplier effect for the economy as
a whole, increasing public investment could also boost
the utilisation of domestic private-sector production
capacity.

That would strengthen the domestic economy,
somewhat reduce dependency on foreign demand and
also stimulate private-sector investment in equipment
and construction.