ifo Viewpoint
A Business Plan for a Digital and Green Transformation
Clemens Fuest
ifo Institute, Munich, 2021
ifo Viewpoint No. 230
ifo Institute, Munich, 2021
ifo Viewpoint No. 230
![](https://www.ifo.de/DocImg/2021_Standpunkt_230_digitale_gruene_transformation.jpg?c=1689236982)
Negotiations for a traffic light coalition in Germany have begun in a good atmosphere, but they will still be difficult. This is especially true for fiscal policy. Here, the task is something like squaring the circle. The green and digital transformation requires considerable private investment in addition to public investment, and the former will hardly take place without substantial tax incentives. Tax relief on investment is also important to support the increasingly fragile economic recovery. At the same time, the debt brake narrows the scope for public borrowing.