Germany: Will digitization get less budget than planned?

In addition to core issues such as environmental protection and social housing, the traffic light coalition agreed to make progress in the area of digitization as part of last year’s coalition agreement. This is quite understandable, since more digitization also results in a reduction in bureaucracy and a boost for companies, as it were. However, it has now become known that the budget originally planned for the “Digital Affairs and Transport” portfolio will be even smaller than in previous legislative periods. This is unlikely to please the responsible federal minister, Volker Wissing (FDP).

Digitization not important after all?

Germany’s digitization has been a vexed issue for years. While we are considered pioneers in many other disciplines, we could almost be described as a developing country when it comes to network expansion and other topics in the field of digitization. This should actually change with the new traffic light government consisting of the SPD, the Greens and the FDP. This becomes particularly clear when you take a look at the coalition agreement negotiated between the three parties in November 2021. The topic of digitization occupies an astonishing amount of space here.

The ambitions were correspondingly high. For example, progress in the area of digitization was to serve as a driver for greater sustainability. When you consider how much paper could be saved in the area of public services and citizen services, this is more than understandable. What sounded promising in the contract seems to be possibly hobbling at the implementation stage. Namely, it has now become known that Volker Wissing and his Federal Ministry are entitled to about 36 billion euros budget, about 5 billion less than it was still the case with the government last year.

The red pencil was not applied everywhere

Once you get into the details, things don’t look any better. For one thing, there’s network expansion. Here, the Federal Minister of Digital Affairs and Transport now has 456 million euros at his disposal, less than half of what was available last year. This means that the all-important expansion of fiber-optic networks in particular is likely to be further delayed. The German government says that the funding pot for such companies is still full to bursting. Just under EUR 1.2 billion is said to still be available. But that is only one side of the coin. Companies that want to push ahead with network expansion complain that receiving funding involves a gigantic amount of work.

According to them, private investors are more conducive to getting there faster. Consequently, it does not seem to be due to a lack of funds that digitization is progressing so slowly. Obviously, it is not only broadband expansion that plays a major role for the government. It also wants to provide financial support for the latest mobile communications standard, 5G. To achieve this goal, Minister Wissing has 103 million euros at his disposal. Compared to last year, when it was only 16 million euros, this is a significant increase. Excitingly, the topic of “autonomous driving” accounts for a lion’s share.

Here it becomes clear why digital and transport coincide within the department. As vehicles become more and more modern, it is exciting to see them increasingly connected via 5G. A closer look at the planned expenditures reveals that the department clearly has a new focus. For example, the ministry now has many times more funds available for areas such as artificial intelligence and digital innovations. In exotic areas such as aerospace, on the other hand, the budget shrinks by almost half.

Corona pandemic causes numbers confusion

Meanwhile, the Federal Ministry of Digital Affairs and Transport has spoken out about what appear to be significant budget cuts. A spokeswoman told colleagues at heise online that the differences are

“from one-time effects in 2021 from Corona aid to Deutsche Bahn”

result. It even speaks of the fact that one comes to the exact recalculation on the fact that without special effects about 1 billion euros more budget is available.