Saarland and Bremen: Investments now possible thanks to the debt brake!

Saarland and Bremen: Investments now possible thanks to the debt brake!

Bremen, Deutschland - On July 23, 2025, the Federal Cabinet decided to change the renovation aid law, which has a particularly important impact on the financial situation of the states of Bremen and Saarland. In the future, these two federal states, which have received 400 million euros in additional grants from the federal budget over several years, will benefit from relieved access to credit. These measures are linked to conditions, such as proof of budget renovation and measures to strengthen the economy. [Deutschlandfunk] (https://www.deutschlandfunk.de/auch-saarland-bremen-Profiten-kuenft-kuenft- von-debut-bremse-100.html) reports that the debt brake was relaxed for the federal states and that you can now take out loans of up to 0.35 percent of your gross

This regulation was initially excluded for Bremen and Saarland, but Finance Minister Lars Klingbeil emphasizes the need to invest more in infrastructure, education, digitization and health care. The draft law, as described on the website of the Federal Finance Ministry procure. This is done with regard to a planned structural component that was recorded in the collective agreement of July 2, 2025 and makes greater financing of future expenditure possible.

effects on the municipalities

One of the crucial points is that the change in the law prospects all federal states to invest more in basic infrastructures. Current problems, such as unpunctual trains and dilapidated schools, are hardly to be ignored. The Federal Center for Political Education describes that Germany has a significant investment backlog, which, around 600 billion euros in additional investments required for coming years. In addition, a survey shows a decline in satisfaction with the infrastructure, which fell from 54 % in 2016 to only 35 % in 2024.

The new regulations that apply to Bremen and the Saarland should help to tackle these grievances. This also clears the path for the shaped infrastructure in these federal states. Klingbeil underlines the importance of investing for the future ability of the states and municipalities to meet the challenges of demographic changes and the age structure.

A look into the future

The municipal old debts are another "shadow ghost" of the financial situation of many cities and municipalities. A comprehensive solution to this problem is sought by the federal government. This can be seen, among other things, in the existing investment package, which provides 100 billion euros, specifically for areas such as population protection, transport infrastructure and digital education. The investment requirement is not low - the Federal Association of German Industry estimates that at least 400 billion euros will be missing in the next ten years.

The changes to the Reduction Aid Act are a further step in a number of reforms that aim to expand the financial scope of the federal states and thus promote vital investments in the infrastructure. Time is pushing and the signs are on action if Germany wants to be up to the challenges of the next decade.