Germany’s 100-billion-euro infrastructure fund stalls amid state disputes
A 100-billion-euro fund for infrastructure projects remains stuck in negotiations between German states and cities. By early 2026, key federal states like Bavaria, Saxony, and Thuringia have still not put forward clear proposals for fair distribution. Meanwhile, cities such as Wiesbaden warn of massive funding gaps for essential services like schools and public transport.
The legal foundation for the fund was laid in March 2025 when the Bundesrat approved an amendment to the Basic Law. This change allows the government to take on new debt specifically for infrastructure investments. However, the regulation awaits final approval from Federal President Frank-Walter Steinmeier before taking effect.
The 500-billion-euro special fund includes 100 billion euros designated for states and municipalities. Yet progress has been slow, with only North Rhine-Westphalia and Lower Saxony reaching preliminary agreements on project financing. Most states remain deadlocked over how to divide the money fairly. Wiesbaden’s Lord Mayor Gert-Uwe Mende has repeatedly called for a needs-based distribution of resources. The city alone requires nearly half a billion euros for new school construction and renovations. Mende also insists on a shift in perspective, urging officials to treat municipalities as equal partners in infrastructure planning rather than just recipients of funds. Cities nationwide face growing pressures to deliver public services, from education to climate protection. The outcome of these negotiations will determine how well local governments can meet these demands in the long term.
The success of Germany’s infrastructure push now hinges on resolving disputes between states and cities. Without clear agreements, critical projects risk delays, leaving municipalities struggling to fund schools, transport, and climate initiatives. The final shape of the distribution plan will define local governance for years to come.
