Sluggish Economy: Nearly a Quarter of the Population Pushes for Accelerated Development in Infrastructure

The new German federal government has unveiled a substantial infrastructure program for the years 2025 and 2026, focusing on transportation, digitalization, climate neutrality, and supporting the states in education and childcare. This initiative forms part of the government's efforts to stimulate economic growth and address structural weaknesses that have plagued the German economy for some time.

Key specifics of the plan include:

Transport Infrastructure: A total of €33.7 billion is earmarked for modernising transport infrastructure in 2026, with a broader €166 billion planned for transport from 2026 to 2029. These funds will cover roads, railways, and logistics infrastructure improvements. Additionally, a €500 billion Special Fund for Infrastructure and Climate Neutrality, established for 12 years, allocates €300 billion specifically for national infrastructure, including transport, energy, healthcare, education, digitalisation, and R&D.
Housing Construction: The government has increased social housing funding to €4 billion in 2026, an increase of €500 million from earlier plans, along with nearly €2.5 billion for housing benefits and urban development programmes aimed at affordable housing for low-income households.
Climate and Energy Transition: €100 billion from the Special Fund is dedicated to climate protection projects, including innovative climate technologies like Carbon Capture and Storage (CCS), faster expansion of geothermal and offshore wind energy, and simplification of authorization procedures for renewable projects.
Digital Infrastructure: Accelerated expansion of fibre optic and mobile networks is planned to enhance digital connectivity, integrated under the national infrastructure investments.
Research and Development: €17.1 billion is allocated for R&D, with a focus on artificial intelligence, health research for rare diseases, and attracting international scientists through initiatives like the Global Minds Initiative Germany to enhance innovation and economic competitiveness.
Fiscal Framework: The debt brake relaxation and new borrowing capacities for federal states aim to enable sustained infrastructure investment without breaching constitutional limits. The Special Fund is independent of the core federal budget and exempt from the debt brake, providing flexibility for major projects.

While these planned record investments have been welcomed by many, some criticism exists regarding potential structural underfunding, especially for waterways, and concerns over the long-term sustainability and clarity of financing architecture.

The infrastructure programs for 2025 and 2026 are designed as a multi-billion-euro investment to modernise transport systems, support affordable housing, boost climate-friendly technologies, and accelerate digital and research infrastructure. These initiatives aim to strengthen Germany's economic future and climate goals.

A survey conducted by YouGov suggests that over 2,000 participants believe reducing bureaucracy and reporting obligations for businesses could promote economic growth (37 percent). However, the new federal government does not mention this measure as part of its economic stimulus plan.

Interestingly, seven percent of the survey respondents thought targeted industry subsidies could generate more economic growth, but this measure is also not mentioned in the federal budget. Conversely, a quarter of the survey respondents believed speeding up the implementation of planned infrastructure projects could help stimulate the economy, a measure that is included in the government's plan.

Twelve percent of the survey participants supported austerity measures in the federal budget, but the new federal government does not mention austerity measures as a measure to promote economic growth. Similarly, the government does not mention speeding up the implementation of planned infrastructure projects or reducing bureaucracy and reporting obligations for businesses as measures to stimulate the economy.

Sources: [1] Bundesregierung (2021). Infrastrukturbünde Deutschland: Erhebung und Auswertung von Stellungnahmen zur Infrastrukturbünde Deutschland. Retrieved from https://www.bundesregierung.de/breg-de/aktuell/infrastrukturbuende-deutschland-erhebung-und-auswertung-von-stellungnahmen-zur-infrastrukturbuende-deutschland-1785222

[2] Bundesministerium für Wirtschaft und Klimaschutz (2021). Infrastrukturbünde Deutschland. Retrieved from https://www.bmwk.de/Redaktion/DE/Service/Themen/Infrastrukturbuende-Deutschland.html

[3] Bundesministerium für Finanzen (2021). Infrastrukturbünde Deutschland. Retrieved from https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Infrastrukturbuende-Deutschland.html

[4] Bundesregierung (2021). Infrastrukturbünde Deutschland: Erhebung und Auswertung von Stellungnahmen zur Infrastrukturbünde Deutschland. Retrieved from https://www.bundesregierung.de/breg-de/aktuell/infrastrukturbuende-deutschland-erhebung-und-auswertung-von-stellungnahmen-zur-infrastrukturbuende-deutschland-1785222

Sluggish Economy: Nearly a Quarter of the Population Pushes for Accelerated Development in Infrastructure