Spending on infrastructure stimulates the economy

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By relieving municipalities from the financial burden on childcare infrastructure, investments in schools and universities or in urban development by around 26 billion euros in the period from 2013 to 2018, the federal government is making a significant contribution to ensuring that planned investment projects - despite the challenges in these areas - can be implemented.

Relieve states and municipalities

The measures also include financial aid to promote investments by financially weak municipalities amounting to 3.5 billion euros from the Municipal Investment Fund (KInvF). As part of the revision of the federal-state financial relations, the federal government and the federal states agreed in October 2016 that the federal government could in future also provide financial support to financially weak municipalities with investments in schools and vocational schools through a corresponding amendment to the Basic Law. To this end, the volume of the fund was increased by a further 3.5 billion euros.

Enable investment in education and social infrastructure, improve division of labor

Affordable housing is a prerequisite for social cohesion and participation. The funds to the federal states for urban and residential construction have been increased by over 5 billion euros by 2020. This is also a contribution to mastering the current integration task. In 2017, the federal government also supported the federal states and municipalities in coping with the refugee situation by providing relief of over 7 billion euros.

In order to guarantee the high quality of the municipal infrastructure, the funds available for investment projects must be used as effectively and economically as possible. The large number and variety of municipal building projects require administrative skills and capacities that not every municipality can provide to the required extent on its own.

Targeted support to municipalities

That is why the federal government has created a special advisory service for municipalities with the newly established Consulting Agency Partnership Germany ("PD - Consultants of the Public Hand GmbH") to support them in the implementation of investment projects.

In order to enable better and faster investments, the federal government and the federal states have agreed within the framework of the new regulation of federal-state financial relations to reform the existing system of order management for federal highways. Motorways and roads as well as the infrastructure company itself remain the sole property of the federal government.

Expand traffic routes, promote energy efficiency

Further investment focuses are on efficient supra-regional transport routes and the more efficient use of energy. Investments in the transport infrastructure will grow by around 25 percent to almost 14 billion euros in 2017. In order to further advance the modernization and expansion of the energy networks, investments in network expansion totaling up to 50 billion euros will be necessary in the coming years . Better regulation, support measures and accompanying campaigns will create the necessary framework for these private investments.

Invest more in research, development and innovation

Since 2005, the federal government has increased its spending on research and development by more than 60 percent. In doing so, it makes a contribution to securing Germany's internationally competitive innovation and technology location.

In addition, the federal government is providing one billion euros in grants for microelectronics up to 2020. This should trigger investments in Germany of over 3.9 billion euros. The companies' projects are notified together with those from the other EU member states involved.

Support the European Investment Plan

Due to the close economic integration in Europe, a lasting strengthening of investments in Germany can only succeed in a prosperous European environment.

This is why Germany is providing substantial support to the European investment offensive and is providing around eight billion euros through KfW to finance projects for the European Fund for Strategic Investments (EFSI), which was created in November 2014. The expansion and extension of the duration of the EFSI beyond 2019, which was decided in autumn 2016, will help to stimulate investment in Europe over the long term.

You can find out more about the European Investment Initiative in the monthly report (PDF, 193 KB).