German railway associations warn against cuts to sector in budget negotiations

Reports that one billion euros of funding to improve Germany’s railways will instead be spent on building more roads have alarmed rail transport associations and NGOs in the country. They warned that such a move would undermine the rail sector’s competitiveness and increase the risk of missing the country’s climate targets, the associations said in a statement released by transport NGO VCD. Investments in Germany’s rail infrastructure have been neglected for decades, they wrote. The government coalition of chancellor Olaf Scholz had promised to invest an additional 45 billion euros into trains and railways by 2027, but the ongoing budget negotiations could “lead to a turnaround” and see this number being revised downwards significantly, the organisations warned. Cutting the 2025 budget by one billion euros disregarded the need for investments and ran counter to the coalition’s policy aims, they added.

An expert commission in 2022 said that investments in railroad infrastructure must be made more reliable and plannable to improve its modernisation, both to increase transport volumes and make operations more sustainable, for example through electrification of tracks currently serviced by diesel-powered trains. The organisations said the country needs a dedicated and multiannual infrastructure fund that shields the sector from political manoeuvring and annual budget negotiations - an approach that is already used in neighbouring countries like Austria or Switzerland. “The railway associations ask the government to immediately halt its austerity plans and instead come up with a system that secures funding in the long run.” A better way to consolidate Germany’s budget would be to abolish climate-damaging subsidies, a measure the government already promised in its coalition treaty.

A ruling by Germany's highest court in November 2023 declared an integral part of the government's funding plan for climate and energy programmes unlawful, dealing a major blow to the coalition of chancellor Scholz. The court's decision opened a 60 billion euro gap in a special climate fund and threw the coalition's funding plans into disarray, causing major uncertainty among policymakers, industry and citizens waiting to implement new projects. Scholz recently defended planned cuts to the 2025 budget amid warnings by researchers that energy transition could suffer.