Overview

• The Bundesrechnungshof labeled the draft law for the Länder-and-Communal-Infrastructure fund “substanzlos,” criticizing the absence of a minimum municipal pass-through, additionality rules and federal intervention rights.
• Parliament is set to hold a first debate on the Länder-und-Kommunal-Infrastrukturfinanzierungsgesetz on Friday, with the audit office urging success controls and tighter eligibility before final approval.
• An ifo analysis reports that planned core-budget investments were cut from about €53.4 billion to €37.5 billion as projects were shifted into the debt-financed fund while social spending in the core budget rose.
• Local associations demand that at least 75% of Länder funds reach municipalities, as states adopt uneven pledges such as roughly 62.5% in Schleswig-Holstein, 60% plus €600 million in Rheinland-Pfalz and about two-thirds in Saxony-Anhalt, while major states like Bavaria and NRW have not set quotas.
• Saxony announced a provisional split of its €4.8 billion with 36% flowing directly to municipal budgets, 22.5% via a strategic arm, 31.5% to the state and 10% for joint projects, and local leaders seek a lower project threshold of €50,000 to include smaller communities.