500 billion for infrastructure – but where is the money?

500 billion for infrastructure – but where is the money?

Germany is about to take a groundbreaking step in infrastructure development. The federal government has decided on a huge special fund worth 500 billion euros, which will primarily be used for investments in ailing public infrastructure and climate protection. Critics, however, are skeptical: the deputy general manager of the Federation of German Industries, Holger Lösch, expressed concerns about the effectiveness of this measure. He warns of a “shifting station” in which funds are only reallocated instead of providing new funds. Lösch is calling for a significant increase in funding in order to successfully reduce the existing investment backlog and advance the urgently needed measures to maintain roads and railways. [Welt](https://www.welt.de/politik/deutschland/article6901b6c4c008edcf0c856b8b/architektur-mittel- Werden-nur-umschichtt-industrie-warnt-vor-mogelpackung-bei-milliarden-sondervermoegen.html) reports that cuts have already been made in the core budget's transport budget, which could further increase skepticism.

The goal of the special fund is clear: Germany should become climate neutral by 2045 and the public infrastructure should be brought into shape. Amendments to the Basic Law passed in March 2025 enable the establishment of this massive fund. The planned investments include, among other things, improvements in rail transport and more funding for digital education and child care. But the Federal Ministry of Transport already sees a billion euro funding gap for the construction of new railway lines, which further underlines the challenge in the infrastructure sector (Federal Government).

Concrete financing approaches

Around 37 billion euros are initially earmarked for financing the measures for 2025. As the federal government emphasizes, annual spending on investments in the federal budget must be at least ten percent above total spending in order to release additional funds from the special fund. The focus is not only on expanding the infrastructure, but also on strengthening Germany's prosperity and competitiveness. [Welt](https://www.welt.de/politik/deutschland/article6901b6c4c008edcf0c856b8b/architektur-mittel- Werden-nur-umschichtt-industrie-warnt-vor-mogelpackung-bei-milliarden-sondervermoegen.html) reports that the black-red coalition has decided to quickly implement all projects ready for construction.

The two-day Transport Ministers' Conference (VMK) begins today in Straubing, where, among other things, the Deutschlandticket and the future of rail will be discussed. This conference could be a crucial platform for setting the course for infrastructure policy and ensuring greater transparency and efficiency in the use of funds. The federal states are called upon to use the funds from the special fund efficiently in order to stimulate additional investments.

In summary, the question remains whether the high expectations placed on the special fund can also be met. With the multitude of challenges and the skepticism from industry, the implementation of the planned projects will be a real test of patience for the federal government. The coming months and years will show whether Germany is really on the right track or whether it is just a sham that cannot solve the investment backlog.