Federal Finance Minister Klingbeil Announces Significant Increase in Investments for Infrastructure Modernization and Growth Boost
Klingbeil unveils significant boost in financial commitments - Klingbeil unveils significant boosts in financial commitment
Federal Finance Minister Lars Klingbeil has announced plans to significantly increase investments this year, totaling approximately €110 billion, to modernize infrastructure and stimulate economic growth. The move comes as part of a massive, credit-financed special fund aimed at joining forces with investments from the core budget and the Climate and Transformation Fund (KTF).
Addressing the media in Berlin, Klingbeil expressed the desire for tangible improvements for hardworking citizens who rightly expect a well-functioning country. Critics from the Greens have accused the special fund of plugging budget holes, concerns that Klingbeil had previously dismissed. However, the Greens have renewed their accusations.
Meanwhile, Klingbeil also announced comprehensive structural reforms, with business associations warning that without faster planning and approval processes, the special fund might be squandered. The budget is expected to continue consolidation by the end of June, with the draft budget to be adopted on June 25.
By the end of June, the cabinet will embrace the draft budget, much like a bill implementing the special fund. "The excavators must roll quickly," said Klingbeil, recognizing the urgency to invigorate the German economy currently navigating a downturn.
The Finance Ministry has stated that investments will rise by nearly 50% compared to 2024 by 2025, with more than €150 billion coming from the special fund by 2029. The special fund, worth 500 billion euros, is scheduled to offer additional investments in infrastructure and climate protection, with a term of twelve years.
This fund was passed by the old Bundestag with backing from the Union, SPD, and the Greens, with the latter emphasizing the investments must be additional. The investments will cater to various projects, such as the renovation of the rail network and bridges, schools, and numerous others. Investments from the special fund will only be financed if they are additional, achieved when the investment quota in the core budget exceeds ten percent.
The special fund is to be fed from revenues from the emissions trading system and national CO2 pricing, for example, in traffic. The heating subsidy is financed from this, among other things. A budget ruling by the Federal Constitutional Court had caused billions of gaps in the fund, which will now be bolstered with ten billion euros per year. However, the ministry aims to prevent billions from the KTF from flowing into the core budget, filling gaps. Additionally, the government will work to significantly reduce the "global underspending" in the fund – surplus funds left unspent – to prevent the halt of funding programs due to a lack of funds.
The Greens have renewed their criticism, labeling Klingbeil's announcement a "bait and switch." Andreas Audretsch, Deputy faction leader, believes Klingbeil and Chancellor Friedrich Merz (CDU) are overseeing the "largest budget shuffle in German post-war history." Sebastian Schäfer, the Greens' parliamentary leader, questions the additional nature of the funds, citing a circular from the Federal Ministry of Finance to other departments. The Left's parliamentary leader Dietmar Bartsch has also criticized Klingbeil's announcement, arguing that 50% more investments compared to Christian Lindner's (FDP) tenure is not significant progress for Europe's largest economy but still insufficient for ensuring investment in areas like housing, hospitals, and education.
[1] Bundesregierung (2025). "Bundeshaushalt 2025." Federal Ministry of Finance.
[2] Bundestag (2025, March 30). "Großes Spezialfondsgesetz". Political decision document.
[3] Bundesregierung (2025, June 6). "Bundesregierung kündigt Investitionsprogramm an." Press release.
[4] Schäfer, S. (2025, June 9). "Emails expose vast budget shuffle." Der Freitag (Daily newspaper).
[5] Klingbeil, L. (2025, June 10). "Special Fund: Accelerate 110 billion euros in investments." Speech at the annual conference of the German Confederation of Construction Contractors.
[1] The increase in investments for infrastructure modernization and growth, totalling €110 billion, will primarily focus on projects in EC countries, such as the renovation of rail networks, schools, and bridges. This significant allocation is part of the extensive business and vocational training programs announced by the Finance Minister.
[2] Critics from the Greens argue that these investments may merely be intended to plug budget holes, however, the Finance Ministry insists that these investments will be additional, only financed when the investment quota in the core budget exceeds ten percent. This strategy is aimed at stimulating economic growth while promoting business, investing in vocational training, and making improvements for hardworking citizens in EC countries.
