German towns fail to tap into government's investment funds

Germany has earmarked billions of euros to increase investment in schools, nurseries, hospitals and housing, but so far local authorities have spent only a fraction of the money because of their lack of planning capacity, data showed on Friday.

Facing international pressure to increase public investment and spend a record budget surplus on infrastructure and education, Finance Minister Wolfgang Schaeuble has made fresh money available through different funding pools. However, government figures show heavily indebted municipalities and states, which historically manage a large chunk of public spending in Europe's biggest economy, have not tapped most of the federal money put at their disposal.

Of the 3.5 billion euros earmarked in an Municipal Infrastructure Fund for investment in schools and hospitals, local authorities so far have used only about 1 percent, figures from the Finance Ministry show.worsen local standards for food, work and industry.