Low public investment may hit euro area private investment

The low level of public investment in euro area, which has been cut substantially over the past few years as a result of fiscal consolidation, could affect private investment. That has been argued notably by Germany where the Federal Ministry of Economic Affairs appointed an independent expert commission to recommend actions to boost investment. 

This commission, which consisted of a group of experts with different backgrounds, public and private sector executives, economists and trade unions concluded that a "central weakness in Germany is the insufficient maintenance of public infrastructure over the past years", as well as a capital stock in the private sector that is outdated and not focussed enough on innovation, notes Barclays.