A significant shift in Germany’s digital governance is set to take effect this week, as the Federal Chancellery, Finance Ministry and newly established Digital and State Modernization Ministry (BMDS) have reached an agreement granting the BMDS unprecedented oversight of IT projects across all government departments. The move, initially championed by CDU leader Friedrich Merz during the BMDS’s creation, aims to address concerns over inefficient spending and a lack of strategic coherence in digital public services.
The agreement, slated for announcement at Wednesday’s cabinet meeting, mandates BMDS approval for all digital projects exceeding €500,000 annually or €3 million in total cost. This applies not only to the acquisition of hardware and software but also to training initiatives and, crucially, encompasses strategic investments in areas like cybersecurity, irrespective of their monetary value. Exceptions are carved out for the defense sector, security services, police forces, intelligence agencies and the tax administration – reflecting the sensitive nature of their operations.
The framework establishes a centralized tool where ministries must register their IT plans, aligning with their budgetary proposals. The BMDS will wield considerable power, scrutinizing project proposals “before, during and after” the budget planning process. Only projects approved by the BMDS will be allocated funding, essentially granting the ministry a de facto veto power over digital spending.
Markus Richter, State Secretary at the BMDS, revealed during a conference at the Hasso-Plattner Institute that the approval requirement takes effect immediately. An existing database already contains entries for 2,000 projects, providing a foundation for the ministry’s oversight.
Critics argue that while the aim of improved oversight is laudable, the sweeping power granted to the BMDS raises concerns about potential bottlenecks in project delivery and a centralization of authority that could stifle innovation within other ministries. The considerable workload facing the BMDS, given the volume of projects already identified, also raises questions about the ministry’s capacity to effectively manage this broadened responsibility. Furthermore, the exceptions granted to sensitive areas, while understandable, could create inconsistencies in digital governance and potentially exacerbate existing vulnerabilities by limiting the application of best practices. The long-term impact of this new regulatory framework on Germany’s digital transformation remains to be seen, but it unquestionably represents a fundamental restructuring of IT governance within the federal government.
