Connect with us

International Circuit

Berlin to Spend €2.4 Bn on Closing Internet Gap

Berlin to spend €2.4bn on closing internet gap Weak digital infrastructure cited as obstacle to doing business in Germany High-speed internet cable is laid for Deutsche Telekom AG at Altenstadt. The German fibre optic network is relatively under-developed © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save to myFT Guy Chazan in Berlin July 31, 2018 Print this page 3 The German government is expected to approve a €2.4bn digital infrastructure fund on Wednesday, as part of its efforts to close a technological gap that is routinely cited by officials as one of the biggest obstacles to doing business in Germany. The funds, drawn from higher-than-expected tax revenues, will be used to expand a notoriously patchy broadband network — particularly in rural areas — and improve connectivity in schools, according to a copy of the draft law setting up the fund seen by the FT. Chancellor Angela Merkel has said that updating Germany’s digital infrastructure is one of the top priorities of her fourth term. Speaking at the World Economic Forum in Davos in January, she said she was determined to improve internet access in schools, promote e-governance and create a better ecosystem for tech start-ups. “I take this challenge very, very seriously,” she said. “We have no time to lose.” Ms Merkel has frequently referred to Germany’s low ranking in international comparisons of digital infrastructure. A recent study by the Organisation for Economic Co-operation and Development ranked Germany 31st out of 35 industrialised economies for fast internet connections. Japan and South Korea topped the list. I take this challenge [of updating digital infrastructure] very, very seriously. We have no time to lose Angela Merkel Part of Germany’s problem is its relatively small fibre-optic network. The OECD data show that only 2 per cent of total broadband subscriptions in Germany are fibre connections, compared with 77 per cent in Japan and South Korea. Under the draft law, which is expected to be adopted at Wednesday’s cabinet meeting, €2.4bn will be transferred this year from the finance ministry to the new digital fund, which will later be topped up with proceeds from the auction of 5G mobile licences. The money will be spent on developing gigabit fibre-optic networks, particularly in rural areas, and on helping states and municipalities to improve the digital infrastructure in schools. The Merkel-led coalition government formed earlier this year pledged to invest a total of €10-12bn in expanding the broadband network, with €3.5bn of that going towards digital education. Germany’s constitution will have to be amended before money can be disbursed to schools, since education is the preserve of the 16 states, not the federal government. Digital funds also have a poor record in Germany. Last year ministers spent approximately €22m of a €690m fund set up to finance expansion of the broadband network — just 3 per cent of the available money. Olaf Scholz, finance minister, announced the transfer of the €2.4bn in May, after revealing that Germany expected to have €63bn more in tax revenue over the next four years than it originally projected. That, he said, left the government with almost €11bn more to spend. In addition to digital investments, he said the extra tax revenue would also go towards providing tax relief for low and middle-income earners. – FT

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2023 Communications Today

error: Content is protected !!