The government’s gigantic debt fund was intended to stimulate the economy and enable investments in infrastructure. However, the money from this so-called special fund is increasingly being misused. Billions of taxpayers’ money are being squandered on political pet projects, while urgently needed future-oriented projects are being neglected. The federal government has created an instrument that was originally intended to promote growth, but is now being abused to plug budget holes. (finanzmarktwelt: 24.10.25)
Misappropriated Special Fund with No Real Impact
Officially, the fund comprises 500 billion euros – distributed over twelve years. 100 billion euros go to states and municipalities, and another 100 billion euros to the Climate and Transformation Fund. The federal government can access 300 billion euros. However, only a small portion of these sums is actually invested in genuine projects. Ministries are shifting existing projects into the special fund and declaring them as new initiatives. This creates the impression of increased activity, even though no new forward-looking projects are being created.
Economists speak of a massive misappropriation of public funds. Tax money is therefore not being used productively, but rather to cover existing obligations. This abusive approach feigns progress but generates no sustainable impact. The debt fund thus becomes a symbol of political trickery.
Government shifts priorities
The ifo Institute confirms: Only about half of the funds from the special fund actually flow into additional investments. The rest plugs deficits in state budgets or covers existing expenses. The government is therefore not using the instrument as a driver for modernization, but as substitute financing for its own failures.
Instead of investing specifically in future projects, politicians are maintaining the status quo. Tax money flows into current costs, while urgently needed reforms are neglected. The misappropriated money evaporates without any economic benefit. This type of fiscal policy is nothing more than systematic deception.
Expensive consequences and rising prices
Another effect concerns construction costs. When billions of euros in contracts are suddenly awarded, prices for materials and personnel skyrocket. As a result, fewer projects can be implemented with the same amount of government money. The ifo Institute warns against this price increase, which makes the already misused special fund even more inefficient.
The higher the costs, the lower the real benefit. Instead of modernizing, the federal government is creating artificial demand and exacerbating bottlenecks. The misused fund is therefore not driving growth, but inflation.
Lack of control and political tricks
Observers see the SPD in particular as the driving force behind this shifting of priorities. It is using the special fund to create room in the budget for social spending. This transforms the debt fund, originally intended as a program for the future, into a partisan political instrument.
This approach undermines the credibility of government fiscal policy. Tax money does not end up in investments, but in short-term projects without lasting value. What began as a modernization effort has now become a maneuver to manipulate the budget for cosmetic purposes.
Short-Term Impact, Long-Term Damage
In the short term, the program may slightly increase the gross domestic product. However, the effect remains statistical, not real-economic. Without structural reforms and targeted future-oriented projects, the fund loses all purpose. The government is buying time, but not a future.
Ultimately, the conclusion is alarming: a half-trillion-euro package of public funds – misused for political expediency. Instead of innovation, it creates new debt and lost opportunities. The special fund has turned into its opposite: a symbol of waste and a lack of responsibility.