Born in Scandinavia, I was always impressed by Germany’s comprehensive, high-quality, dense infrastructure when I travelled here in my youth. Roads, autobahns, long-distance trains, hospitals, schools, universities, pools – wherever I went, everything simply worked.
The highlight of any trip to my parents’ homeland was a car trip along the “Sauerlandlinie”, which took us across one autobahn bridge after another through the hilly green landscape to our grandparents in the small town of Kierspe which had a beautiful indoor swimming pool next to its modern comprehensive school.
That was then, but this is now. Today, many of the autobahn bridges no longer exist, schools and pools are old and worn out, roads are disintegrating, libraries have closed.
Germany in 2025 – tired of the future?
For too long, Germany has relied on its existing stock to make profits, instead of using those profits to improve the stock. The country’s infrastructure which once enjoyed so much investment, has been subject to austerity measures for many years now, so much so that it has become a hindrance:
- 84% of companies in Germany today see the lack of high-quality transport infrastructure as an economic disadvantage.
- 92% of the companies affected say that the state of the roads is the main reason.
- 71% rate the condition of rail transport as a problem in terms of attracting business to German locations.
These statements come from a recent study by The Cologne Institute for Economic Research (IW). The study highlights the fact that Germany’s infrastructure, which once drew business to German locations, has become a constraint to economic success. And the figure has risen sharply since 2013 (2013: 59%, 2018: 67%, 2025: 84%).
500 billion euro to turn the situation around
Germany has set itself a challenge: with the special fund of 500 billion euros investment passed in September 2025 and published in the Federal Gazette on 2 October, the federal government plans to modernise the country’s infrastructure and at the same time achieve climate neutrality by 2045. It is one of the largest investment packages in the history of the Federal Republic, and a historic opportunity to trigger a real innovation push.
The special fund entitled “Infrastructure and Climate Neutrality” is to be invested over a period of 12 years. It will allow for investment loans to be allocated independently of the country’s debt brake. This is a paradigm shift in German financial policy.
The funds will be earmarked as follows:
- 300 billion euros for investments by the federal government (e.g. in transport, energy, digital transformation, education, health)
- 100 billion euros for the federal states and the municipalities
- 100 billion euros for the Climate and Transformation Fund (KTF)
The aim is to bolster Germany’s competitiveness, overcome the investment logjam and make the infrastructure fit for the future. The need for an infrastructure overhaul is enormous:
- Schools and kindergartens: crumbling plaster, out-of-date facilities, scanty digital infrastructure
- Transport: bridges in need of repair, overloaded rail routes, insufficient charging infrastructure
- Digital transformation: slow expansion of fibreoptic network expansion, telecommunications dead spots, a lack of cloud infrastructure for administrative bodies and research
The criticism: watering down instead of a new departure
In spite of the ambitious goals, there is already considerable criticism – not just of the idea, but also of how these plans are to be implemented:
- Industrial associations such as the BDI are warning that the package is a deception. Instead of providing extra funds, existing budgetary funds are simply being reallocated. The investment logjam will continue, according to them.
- Courts of audit of the federal government and the states complain that the legal stipulation that these additional investments must be separate is not clearly explained in a legal sense. They say there needs to be more success management and mechanisms to claim back funds if projects are unprofitable.
- Economic experts like Clemens Fuest (ifo-Institut) criticise, saying that trust in financial policy is being broken. The funds are not being invested where they are needed most – for example in schools, railways and digital networks.
Innovation begins with infrastructure
When talking about innovation, one must also talk about infrastructure. Without high-performance networks, modern educational institutions and reliable transport routes, any technological vision remains theoretical. The special fund can be a catalyst – if used correctly.
But current criticism shows that money alone is not enough. A clear strategy, political determination and the courage to question old structures are also needed. Only then will the special fund become a fund for the future.
Conclusion: create trust, shape the future
The federal government has created a powerful instrument in the form of the special fund. Now it must prove that it can also use it strategically. However, companies, investors and citizens must also ensure that the fund is used wisely. After all, it is not the state that will secure high-quality products or innovative services; companies must take care of that themselves.
Bernd Buschhausen, Managing Director
H/Advisors Deekeling Arndt