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News Brief: The German Finance Ministry has dismissed allegations from economic research institutes that funds from a €500 billion special fund have been misused, asserting that the majority of planned investments are indeed additional.

The German Finance Ministry has responded to accusations from the Ifo Institute and the Institute of the German Economy (IW) regarding the misuse of funds from a €500 billion special fund intended for infrastructure modernization. Critics claim that up to 95% of the funds were diverted from additional investments to cover budget shortfalls. However, Armin Steinbach, head of the Ministry’s policy department, argues that 172.5 billion euros of the planned 176.9 billion euros in investments are additional from both constitutional and financial perspectives. The Ministry contends that the comparison made by the institutes is flawed, emphasizing that without the special fund, investment levels would have significantly declined. Meanwhile, some economists counter that the late implementation of the budget does not address the core issue of fund misuse, citing reductions in core budget investments. The debate continues as the government defends its investment strategy amidst growing scrutiny.

Original Source: www.handelsblatt.com