The German government plans to penalise ministries that are slow to tap their share of a special €500bn infrastructure fund set up by Chancellor Friedrich Merz.
Finance minister Lars Klingbeil is considering a “bonus-malus” mechanism under which ministries that lag behind on spending could see their funds suspended and redirected elsewhere, according to a finance ministry official.
The proposal is intended to speed up the deployment of the 12-year infrastructure fund set up last year by Merz’s coalition to modernise Germany’s ageing transport, housing, health, communications and energy networks after decades of under-investment. But the penalties system could prove controversial as it would challenge the German tradition of ministerial autonomy.
The initiative is the latest sign of Germany’s dramatic shift in economic policy after two decades of policy defined by fiscal discipline and the pursuit of balanced budgets, known as the Schwarze Null.
The rollout of the investment programme has been hampered by administrative problems and has led to an uneven deployment of money.
