The German coalition government’s infrastructure special fund, totaling 500 billion euros, is projected to significantly constrain the budgetary flexibility of future administrations.
According to reports citing calculations from the Federal Ministry of Finance (BMF), annual repayment obligations of 16 billion euros are slated to begin no later than 2044. This is due to provisions within the draft law establishing the supplementary budget, which mandates repayment of the borrowed funds, a structure similar to that of special funds allocated for the Bundeswehr (German armed forces) and emergency loans issued during the COVID-19 pandemic.
The BMF’s projections indicate that repayments for these earlier funds will commence in 2028 and extend over 31 years, with an annual repayment rate of 14 billion euros. The addition of infrastructure special fund debt repayments will result in a total annual debt servicing burden of 30 billion euros for the federal government.
