How fit for the future is Germany?
March 12, 2025
On September 11, 2024, one of the four bridges crossing the Elbe river in Dresden collapsed. It was the Carola Bridge in the world-famous baroque Old Town. The fact that there were no fatalities or injuries is nothing short of a miracle.
The reason for the collapse was quickly identified. The steel used to build the bridge between 1967 and 1971 was badly corroded and cracked.
It is estimated that there are around 130,000 bridges in Germany. Almost 40,000 of them are on highways (Autobahn) and interstate roads. According to the Federal Ministry of Transport, around 5,000 of these bridges are in urgent need of repair or need to be demolished and rebuilt.
In 2024, €4.6 billion ($5.01 bn) was budgeted for the renovation of highways, interstate roads and the bridges connecting them. A total of €5 billion had been earmarked for this purpose in the budget discussions for 2025 that failed once the previous German government collapsed. This sum, the federally owned Autobahn-GmbH believes, is insufficient.
Roads, railroads, telecommunications
It is not only bridges and roads that need to be renovated, but also ageing railroads, energy and water systems, telecommunications, school buildings, and hospitals. Infrastructure has been neglected for decades. "Our country is running on empty," warned Lars Klingbeil, co-chairman of the center-left Social Democratic Party (SPD), in early March.
Plans for a general overhaul of the rail network are currently underfinanced by around €13 billion. By 2030, Deutsche Bahn, which is already overcrowded and infamously unreliable, plans to repair the 40 most important sections of track, which cover around 4,200 kilometers (2,610 miles).
Just how expensive a single transport infrastructure project can become is illustrated by the construction of the Stuttgart 21 Railroad Station. Work has been underway for 15 years and official cost estimates have risen several times: from €4 billion at the start of construction to €11 billion in December 2023.
In June 2024, the Federation of German Industries calculated that €165 billion would be needed for transport infrastructure alone over the next 10 years. The incumbent Minister of Transport, Volker Wissing, was planning to set up an infrastructure fund worth billions of euros for this purpose, for which he also wanted to mobilize private capital. But this came to nothing.
The electricity grid
Enormous sums will be needed to further expand the electricity grid. Wind power is mainly generated in the north of Germany. To distribute the energy across the country, more and sturdier power lines will have to be built. According to estimates by the electricity grid operators, the expansion of the electricity grids could cost €55 billion alone — plus €110 billion for the expansion of the local distribution grids by 2033.
So far, costs have been passed on to consumers and to companies. But this makes them less competitive worldwide. If the new government wants to ease the burden on consumers, it will have to cover some of the costs. Plus, there are the costs for setting up reserve power plants and a hydrogen network.
Housing and education
There is a considerable shortage of housing across Germany, especially in cities and metropolitan areas. As a result, rents have soared in recent years, in some cases drastically. In Munich, for example, €24 per square meter for new rentals is no longer unusual. This has many negative consequences:
Increasingly, people on average salaries can no longer afford to live in cities. Employers who do not pay top salaries can only find workers if they offer company housing.
In its analysis, the Federation of German Industries calculates that an additional €56 billion would have to be invested over the next 10 years in order to stimulate housing construction, but also to be able to build in a climate-friendly way.
The renovation of kindergartens, schools, and university buildings and the digitalization of all educational institutions, according to estimates from the Federation of German Industries, will require €100 billion in funding. The Education and Science Workers' Union (GEW) even puts the figure at €130 billion. "The German education system is like a huge construction site. The tasks are enormous," the GEW said in a statement at the beginning of March 2025, adding that the shortage of skilled workers, especially in daycare centers and schools, is 'dramatic.'
Education is the responsibility of the 16 federal states. However, cities and municipalities also maintain the infrastructure, but because they simply do not have enough money, municipalities invest the least.
Hospitals and disaster relief
There is an investment backlog of around €50 billion in the hospital sector. According to the German Hospital Federation, around 70% of all hospitals in Germany are operating at a loss.
Around €10 billion is needed to provide for disaster relief. This includes crises and large-scale catastrophes such as floods and other weather-related disasters, but also includes providing support in the event of war.
If all these figures are added together, then hundreds of billions of euros will indeed be needed over the next few years to ensure that Germany's technical and social infrastructure is back in good condition.
This article was originally written in German.
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