Traffic light stop: a stop instead of a start in digitization

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Following the end of the "traffic light" coalition on Wednesday evening, Federal Chancellor Olaf Scholz (SPD) wants to continue with a red-green minority government until mid-January 2025 in order to get a number of bills through parliament. This also concerns a large number of digital policy projects, including some implementing and accompanying laws for European directives.

Without the government's own majority, the projects could fail in parliament. If they remain pending until the new elections, they will lapse and have to be restarted in the next legislative period. In addition, it is currently completely unclear how much time the federal government has left, as opposition leader Friedrich Merz (CDU) is pushing for earlier elections.

Kritis legislation theoretically still possible

Among other things, the laws on critical infrastructure are currently open: on the one hand, the NIS2 Implementation Act to strengthen cyber security, which is already being discussed in parliament, and on the other, the Implementation Act to improve the physical protection of critical facilities, which was only launched by the cabinet on Wednesday afternoon. The federal states, which are currently largely led by the Christian Democrats and Christian Socialists, had also pushed for the law to be passed soon. It is currently uncertain whether the parliamentary group in the Bundestag will be impressed by this.

The German implementation of the European AI Regulation (AI Act) is also affected. Among other things, this should establish the Federal Network Agency as the main competent supervisory authority. There is a double problem here: on the one hand, the German accompanying legislation has not yet been completed, and on the other hand, the Federal Network Agency has not yet provided any positions for this. These would only be established with the next federal budget – but this will not be forthcoming.

The cabinet has not yet passed the law to implement the revised European EIDAS Regulation, which is intended, among other things, to enshrine the requirements for wallet solutions that can be used throughout the EU in German law. The plans in the healthcare sector are also unclear: for example, the law to transform Gematik into a digital health agency is still being discussed in parliament.

Quick freeze, hacker paragraph before the end

The FDP's Quick Freeze project, intended as an alternative to suspended data retention, has little chance of being implemented. The new regulation of intelligence services is also unlikely to stand a chance. It is unclear whether the so-called security package, which would have allowed the BKA and federal police to carry out complex data analyses and biometric comparisons of facial and voice data with publicly available data, could be implemented. The CDU/CSU did not go far enough with the project and blocked it in the Bundesrat.

The recently presented initiative to decriminalize IT security research, the reform of the so-called hacker paragraph, also does not have sufficient priority to be completed. The law on employee data protection is also unlikely to stand a chance – This has not even made it into the cabinet so far. Neither the CDU/CSU nor the FDP are likely to be willing to cooperate here.

In addition, there are a large number of laws that are not primarily digital policy-related, but are primarily intended to improve the digitalization of processes. These include many projects in the area of justice and administrative digitalization, such as the digitalization of real estate contracts or construction contract law.

Other projects will also run into problems with the lack of a federal budget for 2025, which will no longer be passed due to the failure of the coalition. This means, for example, that the Federal Network Agency's planned funding for the supervision of the Digital Services Coordinator will not take place as planned for the time being.

Provisional budget management expected for months

In addition, the principle of provisional budget management applies without an adopted budget: the federal government may then only incur expenditure that is undoubtedly necessary. This applies not least to projects that depend on federal funding –, including research projects, but also other initiatives such as broadband expansion funding. The remaining federal government consisting of the SPD, the Greens and Volker Wissing must now examine the concrete effects of this.

It is also unlikely that the next federal budget will be passed quickly after the next election: before that, – there are still – foreseeably complicated exploratory and coalition negotiations to be held, which could drag on for months in 2025 and thus, according to Scholz's current plan, until early summer.

On Wednesday evening, Scholz dismissed Finance Minister Christian Lindner (FDP) and announced that he would call a vote of confidence in mid-January 2025. This would make new elections in spring likely. FDP ministers Marco Buschmann (Justice) and Bettina Stark-Watzinger (Research) subsequently announced their resignations. Digital Minister Volker Wissing surprisingly announced his resignation from the FDP on Thursday morning and intends to remain in office.

(mki)