Overview

• The German Greens accuse Chancellor Friedrich Merz and Finance Minister Lars Klingbeil of using the €500 billion special fund to cover regular budget shortfalls instead of financing additional investments.
• The €500 billion fund, approved in March 2025, is designated for infrastructure modernization and climate transformation, with €400 billion for transport, energy, and digital projects, and €100 billion for climate measures over 12 years.
• A directive from Finance State Secretary Steffen Meyer instructing ministries to reduce regular budgets by the amounts covered by the fund has fueled concerns of budgetary manipulation.
• Finance Minister Klingbeil refutes the claims, asserting that clear rules ensure all special fund expenditures are additional to the regular budget, with at least 10% of the federal budget allocated for investments.
• The Council of Economic Experts warns that the fund will only boost economic growth if it supports sustainable investments, cautioning against its use for consumptive spending such as subsidies or pension increases.