Kay Scheller, President of the Federal Court of Auditors, accuses the German government of inefficiency and “state failure” in an interview with Welt am Sonntag, particularly regarding its handling of multi-billion-euro special funds. According to him, the debt-financed money too rarely flows into genuine investments, and the relevant authorities often fail to implement it effectively. He cites the electric vehicle subsidy program as an example, where constant policy changes appear haphazard and confuse consumers. Scheller argues that this creates perverse incentives in the federal budget and also reduces the financial leeway for national defense and the renovation of dilapidated infrastructure. (welt: 23.02.26)
Special Funds – Money Available, Impact Too Small
Scheller criticizes the fact that the special funds are failing to achieve their investment purpose, and therefore focuses on spending practices. “Clearly, the money is not flowing into investments to the extent that these debt-financed programs should,” he said. He links this to a clear accusation against the government and authorities, because the programs are designed precisely for this purpose.
The head of the Federal Court of Auditors also warned against a shift in the core budget. “This creates leeway for consumer spending in the core budget. That cannot be allowed; it contradicts the required and appropriate additionality of these funds,” Scheller cautioned. He means that special funds must not indirectly facilitate consumption while investments are neglected.
Lack of a plan for electric car subsidies – trust and planning are eroding
Scheller sees no reliable strategy in the electric car subsidies and also views them as sending a damaging message. “Many citizens find it difficult to discern a strategy here – I’m one of them. In and out of electric car subsidies, now back in again – what are consumers supposed to make of that?” he asked. He directly links his criticism to the credibility of government decisions, because buyers and businesses need planning certainty.
Scheller is clear on this point, but without evasions. “It’s not good when the government acts like this. It seems haphazard. Where is the long-term plan?” His statement highlights the consequence that funding policies stifle investment when they constantly shift direction.
Government Agencies as a Bottleneck – Structures Stopping Billions
Scheller sees the federal administration as the problem of implementation, which is why he focuses on structures rather than just sums of money. “Now, a lot of money is being channeled through structures that are often simply incapable of using it effectively.” He describes a bottleneck that delays projects and reduces their impact.
He derives a logic of budgetary risk from this, while new programs continue to expand. If government agencies fail to translate funds into action, investment targets remain unmet. At the same time, costs rise because construction projects, procurement, and planning are protracted.
Subsidies Under Scrutiny – Eliminating Diesel Advantages
Scheller calls for a fundamental review of subsidies and also points to climate-damaging tax breaks. He further cites existing tax breaks as problematic because they create conflicting incentives. As an example, he mentions the diesel subsidy for buses in public transportation.
For him, this also includes a willingness to save, which is why he demands political priorities. “Anyone who has to deal with a changed reality has to set priorities, has to decide what really takes precedence – and what doesn’t,” he said. “This requires decisiveness and courage – which I don’t currently see to the extent that the country needs.”
Welfare State – Focus on the Needy Instead of Broad Support
Scheller wants to concentrate benefits more on those in need, while the state needs room for maneuver to take on new tasks. “It should be geared towards the truly vulnerable and those who truly require assistance,” says the President of the Court of Auditors. He questions the provision of support “well into the middle class” and demands a clear assessment.
Scheller frames the core issue as a financial decision, which is why he asks what is affordable. “The fact that the welfare state provides support well into the middle class must be examined. What can we still afford if we need room for maneuver to take on new tasks?” He thus directly links social policy with investment and security priorities.
Defense and Infrastructure – New Priorities, Harsh Reality
Scheller calls for sustainable budgeting and sound finances, while simultaneously speaking of a “new reality.” “It must adapt to the new reality. This is underdeveloped. But reality will not adapt to us and our capabilities.” He expects concrete decisions to emerge from this, because mere announcements won’t repair any bridges.
He cites investments in national defense, because Germany can no longer rely on the protection of the USA. He also points to the “deteriorating infrastructure: the railways, the highways, dilapidated bridges,” which urgently needs to be renewed. In his logic, the two are interconnected, because only a capable state can manage both simultaneously.