Many problems with underfunded old infrastructure.
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"The office determined that further funds for refurbishment plans should only be made available once the Transport Ministry had “prove beyond doubt that these are necessary and economical.”
That puts them into a hard position – either prove beyond doubt the money has to be spent, or continue to run on a worsening basis. The word “economical” could be interpreted in different ways depending on which side uses it.
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Germany is very careful about deficit spending as a result of its history in the 1920s. Too cautious.
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I’ve posted before about their money history. My father fought with the 3rd Army through Germany, and he brought back some money. One of the bills was two hundred million Reichsmarks, and he said the German people couldn’t buy a loaf of bread with it.
After that, I really don’t blame them too much for their caution.
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Yes, I had a few of those Reichsmark notes also. There is such a thing as overreaction.
Article 109, paragraph 3 and Article 115 of the Basic Law, Germany’s constitution, is designed to restrict structural budget deficits at the federal level and limit the issuance of government debt. The rule restricts annual structural deficits to 0.35% of GDP.
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Germany eliminated the so-called “debt brake” earlier this year, mostly to facilitate increased defense spending. Hopefully they will be able to update their rail infrastructure as well. I’ve ridden DB many times over the years and it astounds me how it’s gone downhill over the last decade.
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Yes I read that. But mostly for purposes of arms and increase the Bundewehr to protect against Russian aggression since we are no longer reliable partner.
The decline in services is especially noticeable in recent years with introduction of the cheap Deutschland pass. 40-50€ month unlimited rides in Regional trains (not ICE, IC or EC).
The debt brake is still in place. In 2025, an exception was included in the Basic Law for the rearmament of the Bundeswehr, which stipulates that defense spending may only be included in the budget up to 1% of GDP; anything above this may be financed by debt. In addition, a debt-financed special fund of 500 billion euros over a period of 12 years for infrastructure, climate protection, etc. was created outside of the debt brake.
I’m afraid that won’t be nearly enough.
And it’s true that we are being overcautious. Our debt ratio will be around 62.5% in 2025, but there is not that much leeway, as the Maastricht Treaty limits the ratio to 60% in order to ensure the stability of the euro. However, the average for the eurozone is 82.5% despite the threat of penalties, while the USA has 127.4%.
I don’t see debt repayment as a problem, it will probably never happen. In my view, the question is rather at what level of debt a state can no longer afford the refinancing costs and interest.
The punctuality of the trains leaves a lot to be desired. The 62% punctuality stated in the article refers exclusively to long-distance trains; regional trains are 88% punctual. Trains are still considered punctual as long as they are less than 6 minutes late. The 6 minutes ensures that connecting trains can still be reached when changing trains.
The deterioration of the infrastructure has a name: The General Railway Act of 1994, in which, among other things, the privatization of the German Federal Railways was stipulated. As a result, the balance sheets were polished up for a stock market flotation, in which only the most essential investments were made.
The IPO never took place. The now privatized Deutsche Bahn is 100% owned by the federal government.
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Can you explain what seems to be a contradiction?
The prospective IPO shares were never issued. So Deutsche Bahn AG (DBAG) is all owned by the federal government. AG = Aktiengesellsshaft. Which means a stock corporation.
As Charlie said, Deutsche Bahn is a public stock corporation under company law, but all shares are still held by the federal government.
DB has since been reorganized once again. DB Netz, DB Station & Service and DB Energie have been merged into one infrastructure division, DB InfraGO AG.
DB InfraGO AG is intended to work in the public interest.
Translated Quote:
According to the German government, companies oriented towards the common good are characterized by three dimensions: First, that “social goals that serve the common good are the reason for entrepreneurial activity, often expressed through a high degree of social innovation”. Secondly, that the majority of profits are reinvested in order to achieve the social objective". And thirdly, that their ownership or organizational structure “secures or contributes to the pursuit of the social objective, using democratic or participatory principles”.
Source: https://www.aktive-buergerschaft.de/was-sind-gemeinwohlorientierte-unternehmen/
The federal government will also remain the owner of this new company.
Regards, Volker
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