The Merz Government's Debt Disaster: Special Funds as a Risk to Innovation and Intergenerational Equity
With the introduction of a special fund of 500 billion euros, Chancellor Friedrich Merz has made one of the most radical about-faces in German fiscal policy. Merz had categorically ruled out any loosening of the debt brake during the election campaign. Just days after the election, the new grand coalition of CDU/CSU and SPD agreed on a credit-financed mega-package that breaks previous standards and discards the principles of the "black zero" and fiscal discipline[5][7][3]. The special fund is intended to flow into the modernization of infrastructure, defense, digitalization, and research and innovation over the next ten years. Specifically, billions will be provided for the backlog of repairs in schools, universities, hospitals, roads, and the railway system. At the same time, high-tech sectors such as quantum computing, artificial intelligence, and space travel are to be specifically promoted to strengthen Germany's innovative capacity[2][8][1]. The SPD also wants to drive forward green tech, hydrogen, and sustainable production. But the money attracts desires: from Deutsche Bahn, which is demanding almost 150 billion euros ...

