reported from the source

Quick summary: A year after the German Bundestag approved a historic debt package for infrastructure and climate protection, researchers report that only a small portion of the funds has been used for intended projects, with most being used to cover budget shortfalls.

Berlin/Köln/München. A year ago, the Bundestag decided on an unprecedented debt package: 500 billion euros were to be allocated for infrastructure and climate protection. Twelve months later, researchers provide a sobering assessment: only a small part of the special fund for infrastructure has actually flowed into the intended projects. Instead, the majority of the billions in debt has been used by the government to fill budget gaps. The special fund for infrastructure is a debt-financed pool intended to enable new investments and provide a long-term boost to economic growth. It operates alongside the regular federal budget, and unlike the core budget, there is no debt brake here. The fund is filled with loans amounting to 500 billion euros, which can be spent over twelve years. Importantly, the Basic Law stipulates that the money can only be used in addition to investments already planned in the core budget. It aims to help resolve the massive backlog of investments in transportation infrastructure, education and digitalization, housing construction, and energy infrastructure. “We are investing now more than ever in the strength and future viability of our country,” stated Finance Minister Lars Klingbeil (SPD). Of the total, 300 billion euros are earmarked for federal investments, 100 billion euros are specifically allocated for climate protection through the Climate and Transformation Fund, and another 100 billion euros are designated for the states, primarily for investments in municipalities. What do the research institutes say? The Munich Ifo Institute and IW Köln have examined how the funds have been used so far and reached similar conclusions. According to Ifo, 24.3 billion euros in loans were taken from the special fund in 2025. However, the additional new federal investments were only 1.3 billion euros higher than the previous year. The researchers conclude that 95 percent of the funds were not used for additional investments. Various projects were instead shifted from the core budget to the debt-financed special fund, particularly subsidies in the transportation sector. President Clemens Fuest criticized that the federal government has used the loans almost entirely to plug budget holes. IW Köln calculated that 86 percent of the funds from the special fund were misused. Overall, federal investment expenditures increased by only two billion euros—”just enough to offset inflation.” Additionally, 12 billion euros from the special fund replaced expenditures that had previously been financed from the core budget. Overall, the federal government has utilized much less money from the fund than planned. Is this criticism surprising? No, the Bundesbank had already accused the federal government in August 2025 of a significant portion of the new debt not flowing into additional investments. The opposition in the Bundestag, particularly the Greens, had feared a “shifting station” a year ago. Now, faction leader Katharina Dröge states: “This was the historic opportunity for Friedrich Merz and his chancellorship. And a year later, one must say: he squandered it.” Klingbeil is a poor finance minister, and the CDU cannot handle money. What does the government say about the criticism? The Finance Ministry initially did not respond to inquiries from the German Press Agency regarding the studies. However, in the closing report for the 2025 budget year, it stated: “The special fund has contributed to increasing the federal investment expenditures overall by 17 percent compared to the previous year.” Recently, the ministry under Vice Chancellor Klingbeil has consistently pointed to the precise wording in the Basic Law. There, investments are classified as additional when an “appropriate investment quota” is achieved in the core budget, which was later set at a minimum of ten percent. In its budget planning for 2025, the federal government nearly achieved this. However, since not all planned funds were called upon, the final calculation only reached 8.7 percent. But for legality, the planned, not the actual expenditures count. IW Köln considers this a “structural birth defect” of the special fund. The head of the CSU in the Bundestag, Alexander Hoffmann, emphasized that he does not share the researchers’ criticism. “We had tough discussions in the budget consultations about not having shifting stations,” he said in Berlin. The funds from the special fund were not used for consumptive purposes, such as citizen income, “but everything for areas of investment.” How much money from the fund has already been spent? So far, only a small part of the 500 billion has actually been disbursed—however, the special fund has only been in existence for a few months. The exact figures for the federal share can be found on the Finance Ministry’s website. As of the end of February, around 39 billion euros have been reported (specifically 39,155,731,903.75 euros). For what exactly is the money being spent? The federal government cites examples such as better daycare centers, schools, roads and railways, affordable and climate-friendly energy, as well as fast internet and additional housing. In the first year, 2025, investments started only slowly, which Klingbeil has repeatedly lamented. He urged other ministries and federal states to ensure that the construction work actually begins. This year, for example, 3.25 billion euros are to be allocated for the maintenance of bridges and tunnels, another 16.3 billion for railway lines. The federal government plans to invest nearly 1.4 billion euros in the renovation and construction of climate-neutral heating networks. 940 million euros from the special fund will go to childcare, and 2.3 billion euros for broadband expansion, with 833 million euros allocated for the renovation of municipal sports facilities.

Source: www.handelsblatt.com