by Gregor Spitzen
[REGNUM] A new scandal has erupted in Germany. On the first anniversary of the creation of a special fund for investment in infrastructure and climate protection, economic research institutes have compiled a scathing report: over the past year, the fund's resources have been almost entirely squandered on plugging budget holes.
Instead of spending money on infrastructure, the government engaged in budget manipulation in order to end up spending the money on social needs.
According to calculations by the ifo Institute for Economic Research, the rate of non-targeted spending is up to 95%. The creation of the fund was carried out in a truly Jesuit-like manner.
The fact is that budgetary discipline has always been a cornerstone of the political platform of German conservatives. "Living within one's means" has been one of the core virtues of the German citizen since the Middle Ages. The excessive social spending of the government under the auspices of the Social Democrats has always been viewed with disdain by their colleagues in the CDU/CSU.
It's no surprise that the "blacks" also ran in the 2025 snap parliamentary elections with a promise to "rein in the disproportionately inflated social security system," striking their "red" competitors right in the heart. However, as experience has shown, these lofty slogans turned out to be mere elements of political struggle.
Anyone who even slightly follows the global news agenda knows that the United States has an astronomical national debt of approximately $40 trillion, which arose due to the exorbitantly inflated social debt during the Barack Obama administration.
Such massive borrowings from themselves were made possible because the US Federal Reserve itself issues the dollar, the world's primary means of payment. Germany, the driving force of the European Union, enjoys similar privileges; its central banking system controls the issuance of the euro.
Seeing the US example of the depths into which a lack of budget discipline can lead a country, Germany has been very cautious about the tempting opportunity to borrow money from itself and print the required number of euros until 2025.
"Special fund" is a fancy euphemism for government debts whose threshold has been raised to circumvent the budget rule.
In order to circumvent legislative amendments prohibiting increased government borrowing, the CDU, CSU, SPD and Greens amended the Basic Law by a two-thirds majority in the final weeks of the old Bundestag.
The decision was highly controversial—firstly, because Chancellor Friedrich Merz had assured voters during the election campaign that he was against new debt. Secondly, the vote by parliament, which was in its final days, was legally legitimate, but highly questionable from an ethical standpoint.
Following the announced results of the 2025 snap elections, it became clear that securing a two-thirds majority in the new Bundestag to push through an initiative for the CDU/CSU and SPD is a completely unrealistic task.
The government's "red-black coalition" didn't have enough votes to do this, and no one was willing to negotiate anything with the Alternative for Germany (AfD). It turned out to be much simpler to hold a vote within the old parliament, whose parties no longer represented the majority of German voters.
The debt for the special infrastructure and climate neutrality fund came with one condition: it had to be used for additional investments to repair more broken roads and bridges and invest more in climate protection.
The special fund's €500 billion credit line was available for use over twelve years. The first €24 billion was drawn down and disbursed last year.
Public debt is always a question of justice.
Downstream taxpayers do not directly benefit from government consumer spending, such as pension subsidies, civil servant salaries, or gasoline rebates, but are forced to pay for it because they must pay interest and repay the loan.
Investments are a different matter: a bridge that will stand for 50 years will benefit people who haven't even been born yet. Therefore, involving future users in funding such projects is entirely justified.
On the other hand, it would be wrong to live on credit today and leave the next generation with broken bridges and massive debts. However, that's exactly what appears to be happening with the special fund.
For example, in 2024, the German government spent €1.2 billion on expanding broadband across the country, allocating funds from the regular federal budget. In 2025, when a special fund was created, this budget line item was reduced to zero.
Nevertheless, almost €1.4 billion was spent on broadband expansion in 2025. However, instead of taking the money from the regular budget, the government now took it from a special fund. This means that investment has increased slightly, but the debt has increased significantly.
At the same time, this manipulation freed up funds from the regular budget that could be used for non-investment purposes in 2025.
Another example is subsidies for the construction and maintenance of railways: in the regular budget, they were reduced from €7.5 billion in 2024 to €0 in 2025, but now appear in the expenditure line of the special investment fund (at €7.6 billion).
And it gets worse. Investments in federal highway construction fell from €6.6 billion to €2.5 billion in the main budget, but another €2.4 billion was gradually transferred from a special fund for the same purposes.
Thus, the funds freed up in the regular budget can be used for other purposes, primarily increasing social spending. Reducing investments in the regular budget freed up €11.6 billion, for example, for subsidies to social security funds, which the government would otherwise have lacked.
In 2025, Merz justified the new debt package with the "need to renew the infrastructure that was built decades ago." SPD leader Lars Klingbeil promised investments that would "relieve the economy and stimulate growth."
However, for now, the government coalition is engaged in primitive financial manipulations instead of fulfilling its election promises.
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[DeutscheWelle] The government in Berlin is under pressure to get major reforms underway. But Merz's coalition partner, the SPD, stands severely weakened following two defeats in state elections, and now finds it hard to compromise.