Germany’s €500bn infrastructure fund moves ahead after political agreement

The Bundestag building in Berlin, Germany (Image: Iliya Mitskavets via AdobeStock - stock.adobe.com)

The plan to loosen Germany’s “debt brake” to spend more on defence and infrastructure was proposed by the CDU and SPD, who hope to form a new coalition government following February’s election.

Exactly how the €500 billion would be spent remains to be determined but it is expected to fund transportation, energy, education and digitalisation projects over the next decade.

Welcoming news of the finance package’s approval, German construction association Das Deutsche Baugewerbe (ZDB) welcomed the news but warned that it was only “half the battle”.

ZDB chief executive Felix Pakleppa said, “The construction industry is relieved that the centrist parties were able to reach an agreement. We are confident that this decision will change our country for the better. Economic stimulus will follow, and national competitiveness will benefit. In order for entrepreneurs to plan their capacities sensibly, they need rapid certainty about what proportions of funding will be allocated to the various infrastructure sectors in the coming years.

“A financial package alone will not modernize a country. The real Herculean task of bringing the infrastructure up to scratch still lies ahead. Politicians and administrators must now deliver concrete measures to reduce bureaucracy. In highway construction, up to 85% of the time can be spent on planning processes at peak times – and only 15% on the construction itself. This is no longer acceptable.”