Germany lacks capital surplus to invest in equipment investments

According to the Frankfurter Allgemeine Zeitung, equipment investments as a share of real gross domestic product, "has declined markedly in Germany over the past 10 years."

"While a ratio of 22.9 percent still ranked Germany in the upper third of EU countries in 1991, Germany lagged all others except Ireland and France in 2002. At 19.7 percent, its investment ratio was also slightly lower than the EU average of 20.4 percent. "

A falling rate of investment in capital means falling rate of increase in worker productivity. Falling worker productivity means slower overall GDP growth. "Experts now estimate the German economy's growth potential at just 1.5 percent, down from 2 percent in the 1980s." By comparison, the "U.S. economy, however, recorded an increase in its investment ratio to 20 percent from 15.5 percent during the 1990s." Also, "Portugal currently boasts the highest absolute investment ratio in Europe, at 26.9 percent." Go Portugal.