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Federal government provides 100 billion euros for infrastructure!
The federal government has created legal requirements for a 500 billion euro special fund to strengthen the infrastructure in the federal states.
Federal government provides 100 billion euros for infrastructure!
The federal government has set a new course for the financial landscape of the federal states. On July 2, 2025, the cabinet approved a draft law from the Ministry of Finance that gives states and municipalities access to special infrastructure funds worth 100 billion euros. These funds are distributed according to the Königstein key, which has been tried and tested for years and is based primarily on two factors: tax revenue and the population of the 16 federal states.
Chancellor Friedrich Merz (CDU) emphasizes the urgency of using the money quickly and in a targeted manner to modernize important infrastructure such as schools, daycare centers, roads and hospitals. The Court of Auditors has already made it clear that these investments may not begin before January 1, 2025, but measures can still be approved until the end of 2036. This leaves enough scope to plan and implement necessary projects in the long term.
The Conference of Finance Ministers, chaired by CDU politician Optendrenk, worked out the key points of this financial support. The suggestion to use the Königstein key as a distribution method was considered factually sound and reliable. In this context, the aim is for a clear distribution of funds across Germany by May 9th. North Rhine-Westphalia benefits the most and receives the largest share at around 21 billion euros.
New debt options for countries
In addition to the infrastructure funds, it was decided that the states would take on new debt. In the future, the federal states will be allowed to take on new debt of up to 0.35 percent of their economic output per year. This represents a significant change, as until now the states were prohibited from taking on new debt through the debt brake. This measure is intended to help countries improve their ability to act in the current financial situation.
Federal Finance Minister Lars Klingbeil (SPD) emphasizes that the federal funds provided should also make four billion euros available for hospitals through an invoice surcharge of 3.45 percent on all full-time and part-time inpatient cases in the somatic area. This is welcome support for the affected institutions in challenging times.
- Nordrhein-Westfalen: 21 Milliarden Euro
- Schleswig-Holstein: 288 Millionen Euro jährlich zusätzlich
- Hamburg: 226 Millionen Euro jährlich bis 2037
With an overall concept of 500 billion euros for infrastructure and climate protection, a breath of fresh air is coming into the financial policy of the federal states. An agreement of this kind could lay the foundation for urgently needed investments in society and sustainably improve the quality of life in many regions.