More investment, for Germany’s sake

Germany, the biggest economy in Europe and in the eurozone, is being urged to invest more at home. Those that support greater investment argue that it would help to spur a faster recovery in the eurozone and reduce the German current account surplus – lines of argument that meet resistance from the German public and the country’s policy circles. However, the case for German investment can be based entirely on narrow self-interest: for the sake of its future prosperity, Germany needs to invest more, regardless of whether that helps the rest of the eurozone. Germany is not investing more for political reasons. But there could be a way to convince the German government to do what is best for Germany – and ultimately for Europe, too.

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