Auditors say Germany should stop ineffective spending on railway and building efficiency

Germany’s Court of Auditors has compiled a list of recommendations for the country’s government to save money in several areas, including pensions, the military, research, transport and others. The list follows a momentous ruling by the country’s highest court that forced the government to erase 60 billion euros from a fund meant to finance climate and transformation measures and threw the budget planning for 2024 into disarray. “The federal government’s financial wiggle room is becoming ever smaller,” the auditors said. Regarding climate-related expenses, the auditors particularly criticised ineffective spending in the transport and in the buildings sector. The transport ministry (BMDV) did not ensure that investments in state-owned railway company Deutsche Bahn are benefiting climate action. Instead, the company “is conducting climate-damaging activities worldwide that have no connection to Germany’s railway infrastructure or national transport.” Moreover, Deutsche Bahn lacks transparency regarding its own greenhouse gas emissions and is instead engaging in “greenwashing” backed by the transport ministry, the auditors said. In addition, the BMDV did not assess the decarbonisation effect and economic viability for alternative engines in railway transport, for which it has earmarked 228 million euros between 2021 and 2022. Part of the money had been used to buy diesel engines, the auditors added.

For the buildings sector, the auditors lamented that a government agency responsible for the management of state-owned buildings has no data on the energy demand of many buildings in its portfolio, casting doubt on the effectiveness of measures to reduce demand and increase efficiency. The auditors note that they have been criticising this shortcoming since 2006 and that a mechanism for effectively managing energy data is only slated for introduction 18 years later, in 2024. Installing some 22,000 metering devices to measure energy use in the buildings is projected to cost up 102 million euros, while estimates by another government institute found that this could have been done for roughly half of the projected amount.

The auditors called on the coalition of chancellor Olaf Scholz to use its budget “in a more targeted, efficient and effective manner.” This would be “necessary also in the interest of following generations,” the auditor court’s head Kay Scheller said. He said the government must “examine all subsidies and rebates according to their effectivity and control for possible disincentives.” By suspending the country’s ceiling on new debt - the so-called debt brake - for three years in a row due to a string of crises (the coronavirus pandemic, the energy crisis, and the Russian invasion of Ukraine) federal debt “has grown enormously,” the auditors said. Debt servicing has therefore skyrocketed from 4 billion euros in 2021 to at least 40 billion euros in 2023. However, climate action, infrastructure modernisation and other urgent tasks mean that there is an enormous need for investments.