Karlsruhe's stance on the matter.
The federal government's Special Asset Fund, a 500 billion euro loan, has raised concerns among economists and politicians. The fund, spanning a period of 12 years, was intended to boost investments in infrastructure, digitalisation, and other key projects. However, recent revelations suggest that the fund may not be used as originally planned.
The ifo Institute's study on September 10 revealed that the federal government is shifting regular infrastructure and digitalisation projects from the regular federal budget to the debt-financed Special Asset. This move could potentially reduce the amount available for new investments in bridges, roads, schools, and digital infrastructure.
The federal government has admitted to misappropriating 4 billion euros from the Infrastructure and Climate Neutrality Fund for hospital reform costs in 2022 and 2023. The misuse of funds is a matter that remains unclear, as the name of the person or institution that filed the lawsuit regarding the misuse of funds from the Special Fund has not been disclosed.
The current draft of the black-red coalition only has 37.5 billion euros in investments in the federal budget, compared to the planned 53.4 billion euros by the traffic light government. This decrease in investments may further reduce the expected economic boost.
Moreover, the federal government is financing "additional" investments from the Special Asset, but is shifting regular projects into it, reducing the amount available for new investments. This could lead to a regular shortfall in investments from the federal budget, as the federal budget is expected to regularly invest funds in investments, but the actual amount that can be invested annually for "additional" investments may decrease.
The federal government is also increasing social spending in the core budget by shifting tasks from it to the Special Asset. This move will leave the federal budget with a much larger mountain of debt due to the federal government's borrowing for modernisation.
On a positive note, 100 billion euros of the fund will go to the federal states and municipalities, and 100 billion euros were promised to the Greens for their climate and transformation fund. The remaining 300 billion euros, over the 12-year period, translates to approximately 25 billion euros per year for investments in infrastructure.
However, the interest burden will eat up an increasingly large part of tax revenues. The 500 billion euro fund is a loan that will require regular interest payments. The possibility of a lawsuit about the misuse of funds in the Special Asset by the Federal Constitutional Court was not mentioned.
In conclusion, the Special Asset Fund, initially intended to boost investments in key projects, is facing controversy due to the shifting of regular projects and the misappropriation of funds. The implications of these actions could have significant effects on the economy and the country's debt.
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