An ongoing debate that already started in the pre-Covid-19 era addresses the question whether the fiscal rules in Germany and the EU have a too restrictive impact on public expenditures. Critics fear that such rules will impede the economic recovery after the pandemic and exacerbate the underfinancing of future-oriented expenditures that was already prevalent before 2020. Opposing views see the biggest obstacles for more public investments in the restricted capacities of the construction sector and cumbersome approval processes instead. The fact that fiscal rules can be circumvented to some extent using creative accounting practices raises additional concerns. The German debt brake, for example, restricts the accumulation of debt for the central government and the 16 states but has little impact on the social security funds, municipalities, or state-owned enterprises (SOEs).This incomplete coverage of the (extended) public sector creates overt incentives to outsource public debt from the core budget to what one might call shadow budgets. Yet, empirical evidence on the relevance of such outsourcing behavior is lacking. This project concentrates on this particular aspect and analyses the extent to which SOEs in Germany are used to circumvent the rules of the German debt brake by shifting public debt and investment activities to SOEs.