The German government is implementing a significant shift in power, granting the Federal Ministry for Digital and State Modernization (BMDS) unprecedented control over IT projects across all ministries, a move critics are already characterizing as both necessary for efficiency and potentially stifling for innovation. An agreement reached between the Chancellery, the Federal Ministry of Finance and the newly established Digital Ministry in late November and scheduled for formal announcement to the cabinet this Wednesday, dictates that the BMDS will now vet and approve virtually all digital transformation initiatives within the government.
Any IT project costing upwards of €500,000 annually or exceeding a total investment of €3 million will require BMDS approval, applying to software and hardware procurement, training programs and digitalization projects alike. Critically, strategic expenditures, particularly those related to cybersecurity, are subject to the BMDS’s endorsement regardless of their financial scale.
To facilitate this comprehensive oversight, ministries are required to register their IT plans within a dedicated online tool. This registration will occur “before, during and after” the budget planning process, effectively embedding the BMDS into the earliest stages of project conception. Only those projects demonstrating BMDS approval will receive budgetary allocation, signaling a sharp prioritization of centralized digital governance.
During a conference hosted by the Hasso-Plattner Institute in Potsdam, State Secretary Markus Richter confirmed the immediate implementation of this “consent reservation” starting Wednesday. A pre-existing database encompassing over 2,000 project entries is already in place, providing the BMDS with an immediate foundation for its expanded authority. Notably, IT procurement within the defense sector, intelligence agencies, the police and security services and the tax administration remain exempt from this new measure.
This forceful centralization reflects a direct mandate from Chancellor Olaf Scholz, initially conceived by Friedrich Merz (CDU) during the establishment of the Digital Ministry itself. The move aims to address long-standing criticisms of duplicated efforts, cost overruns and a lack of strategic coherence within government IT spending. However, concerns are emerging about the potential for bureaucratic bottlenecks, the suppression of experimentation and the erosion of departmental autonomy. The effectiveness of this new system and its impact on the overall agility and responsiveness of the German government, remains to be seen.