German budget plans set to push train ticket prices up – NGOs and trade unions

Rail passengers and freight customers are set to be hit by higher prices as a result of a German government railway funding proposal aimed at ensuring a federal budget in line with the country’s constitutional limit on public debt, several environmental and transport NGOs and trade unions have warned.

The coalition government in August decided to replace billions of euros of regular budget contributions to Deutsche Bahn with more equity capital for the German railway company, as this would help stay within debt limits. NGOs like Climate Alliance and the railway labour union EVG now argue that – as German law prescribes a high return on equity – Deutsche Bahn would have to hike prices to generate the necessary income, which would hurt the goal of switching traffic from the road to the rail.

In a joint appeal, the organisations urged parliamentarians to amend the government’s budget proposal to keep prices down. Negotiations in the Bundestag on the country’s federal budget for 2025 started this week and will last for several months. The alliance called for a fundamental reform of debt limit rules to avoid more budgeting tricks with negative side effects. In addition, they call for a reform of climate-damaging subsidies in the transport sector, and a multi-year federal fund for railway investments.

The August agreement by the government followed months of difficult budget negotiations, after the coalition was dealt a heavy blow by a ruling of the constitutional court in November 2023. The court declared the use of 60 billion euros in the Climate and Transformation Fund unlawful because it violated debt limit rules, leading to disputes between the partners of the government alliance – the Social Democrats (SPD), the Green Party and the Free Democrats (FDP) – about how to reshuffle and cut funding across the board.