The German Federal Finance Ministry has denied the allegations that the special infrastructure fund (SVIG) has been misused.
In a note that appeared in the Handelsblatt Thursday edition, Armin Steinbach, head of the ministry’s principle division, explained that the accusations are unfounded. He and other ministry officials argue that the planned €176.9 billion of investments from the special fund-of which €172.5 billion is earmarked until 2028-are both constitutionally and fiscally justified.
Critics from the Munich Ifo Institute and the employer‑oriented IW institute had earlier voiced sharp criticism of the federal government. According to the IW report, 86 % of the fund’s money was allegedly diverted last year, while the Ifo claimed a misappropriation rate of 95 %. Steinbach contests these figures, stating that they are unreliable. He points out that the fiscal framework for 2024 cannot be automatically extended to 2025 and that what matters is a comparison with the financial plan of the current coalition government, not the previous year’s numbers.
The ministry further notes that, without the creation of the SVIG, disposable expenditures for 2025 would likely have fallen dramatically. It also highlights that the Ifo and IW analyses ignore the significant structural changes in the federal budget, particularly the exemption for security and defense spending, which has substantially increased the core budget’s total expenditures.
Lastly, Steinbach argues that evaluating borrowing on an annual basis does not provide an accurate picture of how the funds are being used. Because the fund spans multiple years, unused investment money may still be spent in future years. Therefore, the charge of simply shifting money around-at least for the federal portion of the SVIG-ultimately proves baseless.
