Negative Capital stock
Germany’s modest capital spending is hardly enough to compensate
for the depreciation of the capital stock. It means that
in future , it will have to allocate more ‘expensive’
resources to replenish its current capital stock.
Since 2013, net investment,
i.e. Gross investment minus depreciation, has been even negative
. This situation is not unique for Germany. Also in Spain and
Italy, net investment is currently in negative territory.
However Germany , the powerhouse of the EU , its lack of
infra structure committment reeks of ‘budget shortfalls’.
By budget shortfalls , lack of finance and tax revenue inflows.
This lack of inflows , caused by poor decision making,
especially in situations , where for example
the Windsors moved North Sea Oil contracts
offshore, to beyond EU.
Thus Germany , with reduced revenues , and a growing EU
has had to cut back on its own infra structure outlays.
This is sending mixed signals to the investment
community at large, especially since Germany
wishes to compete directly with the USA for the
global market.
EU Forecast
euf:b18:7/nws-01