Federal budget 2025: Lindner plans investments worth billions!

Federal budget 2025: Lindner plans investments worth billions!

Christian Lindner, the Federal Minister of Finance, is currently interested in the role of investment minister. However, it must first fulfill its obligations regarding the 2025 budget. Lindner has already received his predecessor Lars Klingbeil's draft budget, which proposes notable changes. The document envisages largely lifting the debt brake for defense and security spending. An important aspect is that there are initial signs that the recession has been overcome. In this context, there is also a planned 500 billion euro extra pot for infrastructure investments, which can be financed entirely on credit. The process for drawing up the federal budget is presented as relatively simple, which gives hope for rapid implementation.

In this context, the Federal Cabinet has passed a bill to finance infrastructure investments for states and municipalities. This stipulates that 100 billion euros will be made available from a special federal fund for targeted investments. The focus of these investments is on the areas of education, transport, energy, digitalization, housing, hospitals and climate protection. The draft law implements Article 143h paragraph 2 of the Basic Law and thus lays the legal basis for the allocation of funds.

Distribution of resources and responsibility

The 100 billion euros made available will be distributed according to the Königstein Key, a procedure for the fair distribution of financial resources to the states. Investment measures supported with these funds must begin after January 1, 2025 and can be approved until the end of 2036. The federal funds should be used flexibly and in a targeted manner, with responsibility for the use of the funds lying with the states. Possible areas of use include, among others, civil protection, transport infrastructure, educational infrastructure and digitalization.

Another essential part of the bill concerns the structural component. This allows countries to use a structural debt leeway of 0.35 percent of gross domestic product. In this context, changes to the Budget Principles Act, the Stability Council Act and the Sanctions Payment Allocation Act are also planned to ensure alignment with EU law. This reform of the Stability and Growth Pact also leads to a new indicator for European budgetary surveillance: net expenditure. The draft law ultimately regulates the distribution of permitted structural borrowing among the individual countries.

Current developments in the area of ​​financial policy show the Federal Government's efforts to lay the foundation for future growth and stability through strategic investments.