The German federal government has set up a €100 billion Sondervermögen—a special fund financed through new debt—to support investments in infrastructure, education, and digitalization.
Bavaria is expected to receive around €15.7 billion over twelve years. But a crucial question remains unanswered: how much of that money will actually be passed on to municipalities?
Local leaders and political parties are now raising demands. The Bavarian Association of Municipalities and the state SPD argue that at least 70% of the funds should go directly to towns and cities, which already carry the majority of investment burdens in the state.
Example from Abensberg: schools as test cases
In the town of Abensberg, near the famous Hundertwasser Tower, the historic Aventinus primary school is being transformed into a modern building at a cost of €24 million.
Uwe Brandl, president of the Bavarian Association of Municipalities and former mayor of Abensberg, sees this as the kind of project that could be financed through the special fund.
Redirecting federal money toward such initiatives, he argues, would free up local budgets for other urgent needs such as bridge and road repairs, where subsidies are often lacking.
What exactly is a “Sondervermögen”?
Despite the positive ring of the word, special funds are essentially new debt taken on by the federal government. The purpose is to finance investments outside the regular budget framework.
Critics warn, however, that these funds risk being used as a stopgap to cover unrelated spending rather than creating genuine long-term investments.
Expert concerns about misuse
Nikolaus Potrafke, economics professor at the ifo Institute, cautions that the original purpose of the fund must be respected.
He warns against shifting resources to cover existing projects or social spending, arguing instead for targeted investment in infrastructure, education, and technology.
“If the money is simply used to patch holes in other budgets, the special fund will lose its intended effect,” Potrafke said.
Local governments demand simple rules
Municipal leaders are also pushing for streamlined procedures. Brandl suggested that it should be enough for municipalities to prove that funds went into projects planned after January 1, 2025.
He stressed that many towns are struggling to meet even their basic obligations and desperately need additional funding.
Finance minister urges patience
Bavaria’s finance minister Albert Füracker (CSU) has so far declined to make binding commitments, pointing out that the legislation is still under discussion.
The Bundesrat is expected to hold its second reading on October 17, after which the formal administrative agreements will be defined.
“Only then will we know legally how much money can be used, for what purpose, and when it will actually arrive,” Füracker explained.
For now, the debate centers on balancing expectations with fiscal responsibility.
