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In precision-driven Germany, crumbling bridges and aging roads

Business may be great in Germany, but its infrastructure? It's threatening the country's vaunted productivity.

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    A station clock is pictured at a platform of the main train station in Mainz, Germany, in August 2013.
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From abroad, the German reputation for precision and productivity appears impeccable. Be it in the production of top-flight cars or making sure city metros remain on time, Germany is always a model of efficiency and effectiveness.

Or so many think. But try a long commute over the country's aging infrastructure, and you may come away with a different view.

Crumbling bridges, lengthy detours, snarled traffic on an aging autobahn: This is the news that has captured headlines at home, raising questions about the state of Germany's infrastructure and its willingness to whip it into better shape.

The concern runs deeper than hardware and frameworks, schedules and scaffolding. Some pessimists are starting to see physical decline as a sign of larger strain on – and vulnerability in – the German economy.

“What we see now is the calm before the storm,” says Olaf Gersemann, who authored the recent book "The Germany Bubble: The Last Hurrah of a Great Economic Powerhouse." It’s a conclusion he says would have raised eyebrows just six months ago, and one that is still mostly falling on deaf ears. “It still doesn’t feel bad, you don’t feel the consequences yet.”

'High noon'

Germany has long had a knack for making and doing things better. "From the outside everyone thinks Germany is clean, efficient, and everything works well,” says Steffi Klotz as she crosses Cologne's Leverkusen Bridge, a cable structure spanning the Rhine that is part of her daily commute. “I’m sorry to say that’s not the case anymore.”

Her commute pits her daily against Germany's chronic underinvestment. The Leverkusen Bridge was a prime example of Germany’s desperate need for investment in a 2013 government report. Built in the 1960s, it was closed down to heavy traffic in 2012 because of cracks that required immediate repair. It is now under continual construction and patch-up, meaning its six lanes are merged into fewer, backing up traffic for miles.

For Ms. Klotz, that turns a drive that should take 25 minutes into one that regularly takes 90 minutes. It’s so bad that she says the traffic reports on Monday mornings don’t even bother with back-ups that are less than five kilometers (three miles). Traffic is what is on the minds at dinner tables, and late arrivals, not the norm in Germany, are easily forgiven.

“We lose time every day because of our infrastructure,” she says.

Jurgen Berlitz, from the German automobile association ADAC, says that in in 2014 there were 475,000 traffic jams totaling 960,000 km (600,000 miles), up from figures in 2013 that showed 415,000 traffic jams totaling 830,000 km (515,000 miles), with a sixth of roadways congested daily.

That’s because some 46 percent of bridges, 41 percent of streets, and 20 percent of highways are currently in need of repair, according to a report by the German Institute for Economic Research (DIW) in Berlin. That group is headed by Marcel Fratzscher, the author of another new book called "The Germany Illusion."

Chancellor Merkel seemed to respond at the end of last year when she announced $12.4 billion in additional investment. The IMF, in its global outlook report in October, had singled out Germany for “much-needed public investment in infrastructure.”

Germany still has better infrastructure than many of its peers, including the United States. But industry leaders worry that the country is slipping, especially in western Germany where business booms but infrastructure lags. (Eastern Germany, which played catch-up in the post-communist 1990s, runs much more smoothly today.)

“It is now high noon to say we have to defend our infrastructure. It’s also a question of efficiency, and the German way of thinking and doing,” says Volker Treier, managing director of international economic affairs at of the German Chamber of Industry and Commerce.

Wutburgers

Indeed, German "thinking and doing" is reason for both the country's current success and its resistance to change.

While the economies of its peers have withered, Germany has basked in a second Wirtschaftswunder, or economic miracle. It has unemployment rates that French, Spanish, or Italian officials envy – drawing those nationals across its borders – as it creates machines and churns out exports. And the economy has rebounded, after dangerously stagnating last spring and summer.

But at the same time, Germany has been constrained by its own drive to balance its budget, and a population not interested in infrastructure spending. As Mr. Treier puts it: “We see ourselves in a strait-jacket.”

Germany underwent painful reforms in the 1990s, when it was considered the “sick man of Europe,” to get where it is today. There is a prevailing attitude among Germans that now is the time to be rewarded for that sacrifice. In addition, there is a deep resentment about the role the EU is playing in German affairs, pushing the country to act in foreign conflict or pay for the troubles in other European nations.

According to polls, some 80 percent of respondents consistently accept taking on more public debt to fund pensions, but in a poll last fall, about the same percentage rejected investing in public works to combat the downturn if it meant debt.

Mr. Gersemann says that demography shapes the mindset. The average age of Germans is 45 years old, according to 2013 figures, and quickly creeping up. “It’s the beginning of the gerontocracy,” or what he says is a population not willing today to pay for the projects of tomorrow. They disproportionately represent the so-called Wutburger movement, after a German word that translates into “enraged citizen.” The Wutburgers have been leading voices protesting big infrastructure projects in Germany.

“They want the country to stay the way it is,” he says. But, he stresses in his book, if Germany stays as it currently is, it is destined to decline.

Political disinterest

And so, politicians respond accordingly. Gernot Sieg, a transportation expert at the University of Muenster, says that the public wants money put toward pensions or schools, and not toward big public works or infrastructure projects. “Most politicians talk not about efficiency but about fairness and social spending,” he says.

In fact, the investment plan Ms. Merkel announced in November has already been scaled back to 7 billion euros over three years, representing just 0.1 percent of GDP annually. And federal investments are just part of the solution, as states play a major role in the infrastructure within their jurisdictions.

And when a single bridge is shut down, an entire chain of production is impacted, says Kurt Bodewig, who headed the government commission in 2013 tasked with prescribing remedies for Germany’s infrastructure woes.

“That is a big problem for an industrial country like Germany,” Mr. Bodewig says. “It calls into question our place in the world, where we have good production, qualified workers, but not a functional transport system.”

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