Federal states are pushing for an investment boost: 500 billion euros in special funds!

Federal states are pushing for an investment boost: 500 billion euros in special funds!

In Germany, an amendment to the Basic Law was passed that sets up a special fund worth 500 billion euros to promote infrastructure and climate protection. Of this, 100 billion euros are earmarked for the federal states to make significant investments. The urgency of these measures is underlined by several federal states, particularly under the leadership of Hesse's Prime Minister Boris Rhein (CDU) and Saxony's Prime Minister Michael Kretschmer (CDU). Rhein is calling for rapid implementation regulations in order to put together a “planning acceleration package”. Kretschmer emphasizes the importance of unbureaucratic implementation, as investments should flow into roads, rails, energy infrastructure, digitalization and climate protection.

Federal Finance Minister Lars Klingbeil (SPD) plans to submit the federal budget for 2025 and the law establishing the special fund to the cabinet on June 25th. All ministries must submit savings proposals for their budgets by next Monday. The Saarland Prime Minister Anke Rehlinger (SPD) supports Klingbeil's plans and emphasizes that the investments must not be allowed to trickle away, but rather provide economic stimulus. In addition, it is important to protect local and state budgets from new burdens, especially after the latest tax estimate, which has increased financial worries among states and municipalities.

Infrastructure policy reform

The coalition agreement between the CDU/CSU and SPD aims for a comprehensive new beginning in German infrastructure policy. The aim is to combat the investment backlog through a package of measures that is intended to create the basis for faster implementation of infrastructure projects. An additional volume of 100 billion euros will be made available via the Climate and Transformation Fund (KTF).

The key reforms include the revision of planning, approval and procurement law in order to be able to implement projects more quickly and efficiently. The aim is to have a uniform, flexible procedural law that operates with clear responsibilities and shortened processes. A “one-for-many” procedural law is intended to make formalized procedures more flexible, while eliminating double testing and environmental testing only being carried out once.

Strategies to accelerate projects

The reforms stipulate that replacement new buildings will not be subject to planning approval requirements in the future and that planning approval will be declared the norm. In addition, the early start of measures for important projects is made possible. In order to make it easier to designate and network compensatory and replacement measures, a Natural Area Requirements Act will be introduced. The digitalization of planning and approval processes is also a key concern in order to increase efficiency.

Another important point is the reform of procurement law. This removes the suspensive effect of appeals against decisions of the public procurement chambers. This is intended to accelerate the implementation of infrastructure projects and ensure clear responsibilities and effective project management by public developers. KPMG Law highlights that it is crucial that municipalities are able to build expertise and reduce administrative hurdles. The successful implementation of these comprehensive measures requires close cooperation between the federal, state and local governments.