Overview

• In a report dated September 8, the Bundesrechnungshof labels the cabinet’s draft for the Länder share of the €500 billion fund “substanzlos,” citing no binding additionality requirement, no success controls, no power to exclude uneconomic plans and the removal of clawback provisions.
• The auditor urges the Bundestag to tighten the bill to guarantee that federally financed credits produce additional, economical and targeted projects rather than enabling double funding or budget substitution.
• An earlier idea to require that at least 60% of Länder funds flow to municipalities is absent from the cabinet draft, drawing criticism over weakened guarantees for local investment.
• The Finance Ministry has set up an external advisory board for the €500 billion vehicle, chaired by Harald Christ, which will report twice yearly on the use of funds.
• States are moving ahead with plans: Brandenburg outlines roughly €3 billion for transport, education, security and hospitals with about €1.5 billion for municipal projects, while Saxony’s internal plan including a 10% pre‑deduction for state‑level projects faces protests from municipalities and opposition.