The multi-billion-euro special fund for infrastructure and climate neutrality is losing its original purpose. Instead of financing new projects, almost half of the funds are being used to plug existing budget gaps. According to calculations by the German Economic Institute (IW), budget shortfalls will amount to around 133 billion euros by 2029. The fund, intended as an investment pot, was meant to modernize bridges, schools, and railway lines. But instead of sustainable development, the government is using the funds to cover deficits. Financial maneuvering is replacing strategic planning, while the energy transition is stagnating and the promised modernization push is failing to materialize. (iwkoeln: 10.11.25)
Lack of dynamism despite billions in the investment fund
Originally intended to provide €500 billion, Germany’s special fund for the construction industry was meant to strengthen the sector and address the investment backlog. However, instead of renewed dynamism, accounting tricks and postponements are dominating. The billions are increasingly being used to plug budget gaps resulting from political compromises. The legally mandated “additionality” requirement remains meaningless. While the federal government formally meets the ten percent quota, this threshold is so low that it has virtually no effect.
Furthermore, even defense spending is being included, although it is not subject to the debt brake. This blurs the line between genuine investment and mere reallocation of funds. Moreover, the states lack any clear guidelines – an open door for further financial maneuvering. Instead of shaping the future, figures are being shuffled, budget gaps concealed, and trust eroded.
Budget Holes as a Political Tool
The coalition is dipping deep into the investment fund to reclassify expenditures. Already planned projects are being relegated to special funds, while genuine investments in the future are being neglected. For example, in 2026, six billion euros will flow into hospital financing, which was originally intended to be covered by health insurance funds and the states. At the same time, the core budget is increasing other items that are officially classified as investments but do not generate any progress in construction.
These creative accounting tricks make the investment level appear higher. In reality, however, no added value is created. Neither climate neutrality nor economic innovation benefits. IW economist Tobias Hentze warns: “With this shuffling of funds, the federal and state governments are jeopardizing Germany’s future viability.” Instead of promoting reforms, the government is cementing old budget deficits and preventing new growth opportunities.
Future prospects dwindle despite special fund
The special fund could have been a driving force for the energy transition and infrastructure modernization. But instead of real progress, billions are disappearing into budget gaps. Without targeted investments in energy, education, and transportation, Germany risks falling further behind internationally.
Hentze emphasizes that policymakers must finally deliver on their promises. Only clear objectives and honest use of funds can create renewed trust. The investment fund must not become a haven for financial tricks. Otherwise, the budget deficits will become entrenched, and the chance for sustainable growth will dwindle.
Responsibility instead of accounting tricks
Current practice reveals a deep structural problem: short-term fiscal policy is replacing strategic planning. Accounting tricks create neither stability nor a future. Only transparency, clear priorities, and the courage to no longer conceal budget deficits will lead to genuine renewal.
If the government consistently uses the investment fund for infrastructure and climate neutrality, Germany can make up for lost time. If everything remains as it is, new budget gaps and a permanent loss of economic strength are imminent. The future demands honesty, not financial tricks—and investments that actually make a difference.