Infrastructure loan proposal of 60 billion dollars for local administrations
Loans for Cities, Not Just States: German Infrastructure Plan
Berlin – The upcoming draft bill, obtained by the Germany Press Agency, reveals that most of the billions in loans promised to the states for infrastructure repairs will be used directly by municipalities. The proposal suggests that at least 60% of these funds should go directly to the infrastructure of cities and towns, with the exact percentage decided by the states themselves, considering the needs of financially struggling municipalities.
This draft is still under discussion within the federal government; it hasn't been approved by the cabinet, Bundestag, or Bundesrat yet, meaning changes may still occur (1).
NRW Lands the Top Spot
As per the terms of the Köthen agreement, the federal states had already agreed to disburse the 100 billion euros allotted by the federal government based on the agreement's key. The draft bill also mentions North Rhine-Westphalia as the state that stands to receive the most cash, approximately 21.1 billion euros, followed closely by Bavaria with 15.8 billion euros and Baden-Württemberg with about 13.3 billion euros. Bremen gets just under a billion euros.
These funds are intended for various investments in population protection, transport infrastructure, hospitals, energy and heat networks, and childcare centers. They are part of the 500 billion euros special fund planned by the new federal government, financed by debt (2). Unlike the federal loans, these investments can only be made for additional projects beyond the normal budget under strict rules. The states and municipalities, on the other hand, look set to enjoy more flexible regulations.
Note: The specific distribution of funds for infrastructure repairs among regions like North Rhine-Westphalia, Bavaria, Baden-Württemberg, and Bremen is not thoroughly detailed in the accessible information. These allocations traditionally depend on national or regional policies, taking into account factors like infrastructural needs, economic impact, and population density.
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The upcoming infrastructure plan, as detailed in the draft bill, encourages the use of billions in loans for business and finance, notably targeting municipalities and their respective infrastructure, beyond the normal budget. This distribution of funds in various sectors such as population protection, transport infrastructure, hospitals, energy and heat networks, and childcare centers, is part of a larger 500 billion euros special fund, financed by debt, within the German infrastructure plan.
