Four urgent investment keys for Europe not to miss the train of the economy before 2040

Germany's major infrastructure investment plan under Chancellor Friedrich Merz has been politically and legally approved since March 2025: the constitutional reform to partially break the “debt brake” and create a special fund of 500 billion euros for infrastructure and environment, plus about 400 billion for defense, was validated by the Bundestag and the Bundesrat. As of August 2026, the “umbrella plan” no longer has major pending parliamentary procedures: what remains is its annual deployment through budget laws, sectoral packages (transport, digitization, energy), and parliamentary oversight. The details of which specific projects are financed, year by year, depend on subsequent decisions by the federal government and the majorities in the Bundestag and Bundesrat. It is worth adding that I do not have access to a real-time German parliamentary database, so I can only rely on the information available from the open sources consulted.

1. Basic content of the investment plan

According to economic media such as Cinco Días, the core of the plan is:

• 500 billion euros over 10–12 years for transport infrastructure, energy networks, and social infrastructure, through a special fund.
• In parallel, about 400 billion additional for rearmament and modernization of the Armed Forces.

Editorials such as “The historical responsibility of Friedrich Merz” emphasize that this represents a historic shift from the German dogma of fiscal austerity and the Schuldenbremse (constitutional debt limit), while other analyses, like this one on public debt, highlight the strong impact on bond markets.

2. Parliamentary procedures already completed

The key process was the constitutional reform to allow this extraordinary borrowing and the creation of the special fund:

• The plan was presented and debated in the Bundestag in early March 2025. Reports such as El País’s and eldiario.es describe the last-minute negotiations with the SPD and the Greens to achieve the two-thirds majority.
• On March 18–19, 2025, the Bundestag voted on the reform with 513 votes in favor and 207 against, as reported by El Mundo and also mentioned in later interviews.
• On March 21, 2025, the Bundesrat definitively approved the borrowing plan and the special fund with 53 votes in favor, no opposition, and 15 abstentions, according to this report.

That is, the constitutional and legal basis of the large infrastructure and defense fund was closed already in March 2025. From Brussels, Vice President Dombrovskis positively assessed the “Germany infrastructure plan and the debt brake reform,” seeing spillover effects for the entire EU, in his remarks before the Eurogroup.

Subsequently, CDU and SPD closed a coalition agreement, described in eldiario.es and El País, in which the execution of the multi-billion investment plan in defense, infrastructure, and environment is one of the central pieces.

3. Sectoral packages already underway

In parallel with the large fund, Germany has been deploying specific instruments, many coordinated with the EU:

• Digitization and networks: the European Commission approved in 2024 the expansion of the German aid plan for gigabit networks, raising it to 38 billion until 2028, co-financed by the federal budget and the Länder, according to the press release on gigabit networks [link].
• Energy transition and green infrastructure: the modified recovery and resilience plan, validated by the Commission and the Council in 2024 (Commission and Council), mobilizes 30.3 billion in grants for 17 reforms and 28 investments, with 49.5% of funds allocated to climate objectives and 47.5% to digital measures.
• The Commission has also authorized state aid for the deployment of energy and gas infrastructures (floating LNG terminals, hydrogen, etc.), covered in various press releases such as those related to hydrogen and LNG (hydrogen network, FSRU), which are integrated into the German energy infrastructure strategy.

4. Remaining parliamentary procedures

In view of the above, the “infrastructure investment plan” has transformed into a multi-year borrowing and spending framework already approved. What remains pending in parliamentary terms (broadly) is:

• Annual approval of the Federal Budgets that specify, year by year, which part of the fund is executed in transport, energy, digitization, housing, etc.
• Processing of sectoral laws and acceleration packages (planning procedures, environmental permits, procurement rules) that allow the money to translate into real projects; these laws must pass through the Bundestag and, in many cases, the Bundesrat.
• Parliamentary control and monitoring of execution: government appearances, status reports, and possible adjustments to the fund’s design if economic conditions or political priorities change.

More detailed information is not available, in the sources consulted, about which specific sectoral laws were still in process in August 2026 or their exact schedule in the Bundestag and Bundesrat. For fine tracking, one would have to consult the official documentation of both German chambers, which I do not handle with the same depth as the Spanish ones.

The European Commission has broad competences but mainly in the framework and supervision of energy transport and distribution networks: it proposes legislation that harmonizes electricity and gas markets, approves technical standards (network codes), ensures competition and compliance with internal market rules, and coordinates cross-border infrastructure planning. Member States retain ownership, direct management, and decisions on the energy mix and specific network deployment. In all matters related to interconnections and the functioning of the internal market, the Commission plays a decisive role. Although I specialize in the Spanish context, these are the general lines of competence distribution at the EU level.

Legal basis and general scope

The Commission's competences in energy networks are mainly based on the Treaty on the Functioning of the EU (articles on energy, internal market, competition, and trans-European networks). Under this framework, the Commission:

• Initiates and proposes legislation (regulations and directives) on the functioning of electricity and gas markets, which directly affect the organization and regulation of transmission system operators (TSOs) and distribution system operators (DSOs).
• Monitors correct application of that legislation by Member States and can initiate infringement procedures.
• Adopts implementing acts and technical guidelines, especially in cooperation with the European regulator ACER and network operator organizations (ENTSO-E, ENTSOG).

Internal energy market and network rules

Regarding the internal electricity and gas market, the European Commission has competences to:

• Define the market model: rules for dispatch, price formation, third-party access to networks, unbundling between generation, supply, and networks, etc.
• Promote and approve network codes and guidelines that establish common technical and commercial rules for transmission network operation, cross-border energy exchange, and congestion management.
• Ensure non-discrimination in network access, supervising that tariffs and access conditions set by national regulators comply with EU law.

These competences mainly affect the transmission network due to its cross-border dimension, but also influence distribution network regulation by requiring principles of neutrality, transparency, and consumer protection throughout the chain.

Competition, state aid, and economic regulation

The Commission is the competent authority for competition defense and state aid in the energy sector. In transmission and distribution networks, this translates into:

• Control of mergers and acquisitions affecting network operators or large integrated operators to prevent dominant positions.
• Evaluation and authorization of public aid to network infrastructure (new interconnections, reinforcements, digitization, hydrogen projects, etc.), requiring that they do not unjustifiably distort competition.
• Supervision of possible abuse of dominant position or anti-competitive practices related to network access and use.

Although network access tariffs are set by national regulators, the Commission can act if methodologies violate EU law principles or constitute disguised aid.

Cross-border infrastructure and planning

In large-scale transmission networks, the Commission has a key role in trans-European energy networks and interconnections:

• Proposes and updates the framework of trans-European energy networks (TEN-E) and projects of common interest (PCI), which include major electrical and gas interconnections or hydrogen networks.
• Coordinates, together with ACER and ENTSOs, the preparation of ten-year network development plans at the European level, which guide national planning.
• Can grant European funding (e.g., through the Connecting Europe Facility) to strategic network projects, conditioning their design and schedule.

This competence mainly applies to high-voltage infrastructure and main gas pipelines; distribution networks remain primarily national responsibility, although influenced by internal market and climate-energy regulations.

Security of supply, energy transition, and coordination

The Commission also intervenes in functional and strategic aspects of networks:

• Coordinates the application of European security of supply standards, which involve obligations on network capacity, crisis management, and solidarity mechanisms among States.
• Integrates network needs into decarbonization frameworks (renewable targets, electrification, hydrogen), promoting that States adapt their networks to facilitate the energy transition.
• Acts as a coordination forum among national regulators, network operators, and governments, especially in situations of tension in energy markets.

In summary, the Commission does not operate or run the networks but defines much of the rules of the game, ensures their application, and directs the integration of infrastructures into a more interconnected and decarbonized European energy market.

EU countries do not have a single, specific regime for “data centers,” but to authorize their construction and commissioning, a set of common regulatory blocks applies: urban planning and permits, environmental assessment, energy and efficiency, and cybersecurity/digital infrastructure protection. Each Member State develops these requirements with its own legislation; in Spain's case, they are articulated through the Environmental Assessment Law, Land Law, building energy efficiency regulations, and critical infrastructure protection and network security rules. Below is a summary of the requirements at the EU level and an example of how they are implemented in Spain, where a more detailed framework exists in the available sources.

1. Urban planning and building permits

At the EU level, there is no general urban planning directive: land use planning is a national/local competence. Therefore, each country must integrate data centers into its own planning (land classification, permitted uses, easements, etc.) and require urban and major building permits.

In Spain, the basic conditions of land and building regulation are set by Royal Legislative Decree 7/2015, of October 30, which approves the consolidated text of the Land and Urban Rehabilitation Law (Land Law). This law requires respecting urban uses, meeting basic functionality, safety, and habitability requirements of buildings, and submitting any new construction (such as a data center) to the urban duties and permit requirements established by each autonomous community and municipality.

2. Environmental impact assessment and environmental authorizations

At the European level, Directive 2011/92/EU on the assessment of the effects of certain public and private projects and Directive 2001/42/EC on strategic environmental assessment require environmental assessment for projects with significant impacts. Depending on the project design (size, resource consumption, emissions, impact on Natura 2000 network, etc.), a data center may be subject to ordinary or simplified assessment.

In Spain, these obligations are specified in Law 21/2013, of December 9, on environmental assessment (Law 21/2013), amended by Law 9/2018 (Law 9/2018). This law:

• Unifies strategic environmental assessment of plans and programs and environmental impact assessment of projects.
• Establishes basic annexes of projects subject to assessment nationwide.
• Seeks to harmonize criteria among autonomous communities and strengthen legal certainty for promoters.

Besides environmental assessment, Member States usually require internal sectoral authorizations (emissions to air, discharges, noise, waste management, etc.), which in Spain rely on regional environmental quality legislation.

3. Energy efficiency and renewable energy requirements

At the EU scale, Directive 2012/27/EU on energy efficiency and Directive 2010/31/EU on building energy performance (amended by Directive (EU) 2018/844) require Member States to set minimum efficiency requirements and energy certification systems. They also promote energy audits in large companies and encourage self-consumption and cogeneration.

In Spain, these principles are specified in three basic pieces:

• Royal Decree 390/2021, of June 1, which approves the basic procedure for energy efficiency certification of buildings (RD 390/2021). It transposes Directive (EU) 2018/844 and requires energy efficiency certificates for new buildings, applicable to data centers as tertiary buildings.
• Royal Decree 56/2016, of February 12, which transposes Directive 2012/27/EU on energy audits, supplier accreditation, and supply efficiency promotion (RD 56/2016). It obliges non-SME companies to carry out periodic energy audits, very relevant for large data centers.
• Law 24/2013, of December 26, on the Electric Sector (Law 24/2013), and Royal Decree 244/2019, of April 5, on self-consumption of electric energy (RD 244/2019), which regulate grid access and connection and the administrative and technical conditions of self-consumption, key if the data center integrates its own renewable generation.

4. Information security, cybersecurity, and critical infrastructures

In the EU, the reference regulations are Directive (EU) 2016/1148 (NIS) and its revision (NIS 2), which require Member States to impose security measures and incident notification on essential service operators and digital service providers, a category where many data centers may fit.

In Spain, digital infrastructure protection relies on several rules:

• Law 8/2011, of April 28, establishing measures for the protection of critical infrastructures (Law 8/2011), developed by Royal Decree 704/2011, of May 20, approving the Regulation on critical infrastructure protection (RD 704/2011). If a data center is considered critical infrastructure, it must have operator security and specific protection plans.
• Royal Decree-Law 12/2018, of September 7, on network and information system security (RDL 12/2018), which transposes the NIS Directive and sets security and notification obligations for essential operators and digital service providers.
• Royal Decree 311/2022, of May 3, regulating the National Security Scheme (RD 311/2022), applicable to public sector systems and, by contractual extension, to many data center service providers to the Administration.

5. Other sectoral requirements

Additionally, Member States usually apply:

• Industrial safety, electrical and thermal installation standards (in Spain, some are integrated through the Technical Building Code and sectoral regulations).
• Data protection and confidentiality rules when the data center processes personal data (in the EU, Regulation (EU) 2016/679 –GDPR– and its national developments).
• Labor requirements, occupational risk prevention, and, where applicable, incentives or conditions associated with public aid to digital infrastructures.

In summary, the EU sets the basic framework (environmental assessment, energy efficiency, cybersecurity), and each country – like Spain – develops it with its own sectoral legislation. Any new data center project must analyze, case by case, how these regulatory blocks intersect in the specific location where it is intended to be implemented.