Die Zentralisation: Germany establishes a Ministry for Digital Affairs and State Modernization

The new German chancellor, Friedrich Merz, has signed a decree last week, establishing a new Ministry for Digital Affairs and State Modernization, thus taking a step toward centralizing digital governance in Germany.

The new Ministry has taken over many digital policy responsibilities from the Federal Ministry for Digital and Transport and other ministries. Yet, some key areas remain shared or divided with the Federal Ministry of the Interior and Community and the Ministry of Economic Affairs and Climate Action. 

The new Digital Minister, Dr. Karsten Wildberger, a physicist by education, and the former CEO of Ceconomy AG, who has also worked for Vodafone and Deutsche Telekom in the past, doesn’t have much political experience, but this may end up being a good thing, if he’s supported by a strong administration within the Ministry. 

If the Ministry receives sufficient policy and financial support, and if the Coalition’s program is ambitious enough to grant it real authority not only in implementation but also policy development, the Ministry of Digital Affairs can help Germany - Europe’s industrial powerhouse - take accelerated steps toward becoming a leader - rather than just an average digitalization example among EU Member States - and inspire larger EU countries to undertake similar reforms.

Responsibilities divided within the Federal Government

The Ministry for Digital Affairs and State Modernization will be responsible for:

• Federal IT architecture - digital transformation of the federal administration (transitioned from the Ministry of Interior and Community); 
• Money - IT planning, federal e-government platforms, and federal IT procurement oversight (with some exemptions); 
• Registers and their modernization; 
• Digital identity infrastructure  (transitioned from the Ministry of Interior and Community); 
• Coordination of AI strategy (together with the Ministry of Economic Affairs);
• Broadband and 5G expansion policy (transitioned from Federal Ministry for Digital and Transport);
• Promoting digital sovereignty;
• Representing Germany in European and international digital policy formats such as G7, TTC, OECD, and more. 

Ministry of Interior and Community will remain responsible for:

• Public safety and cybersecurity for critical infrastructure;
• Federal civil registry and identity documents (physical);
• Internal security-related IT and cybercrime protection; 
• Law enforcement systems. 

Just like in many countries, the most complicated part, at least communication-wise - the municipal digital support will become a shared responsibility between the Ministry of Interior and the Ministry of Digital Affairs.

Ministry for Economic Affairs and Climate Action will remain responsible for:

• Industrial digitalization;
• Funding and strategy for AI, semiconductors;
• Data & platform economy - regulatory oversight for data markets and platform economy;
• Competition and data access regulation (including EU Data Act and Digital Markets Act);
• Digital consumer protection (in cooperation with Ministry of Justice). 

The Ministry of Economic Affairs will share responsibilities with the Ministry of Digital Affairs on AI strategy, data policy, and cloud infrastructure. 

Principles and plans that stand out 

Digital sovereignty  - on its new website, the German Ministry of Digital Affairs lists digital sovereignty as one of its six core principles, aligning with recent EU rhetoric and the long-standing position of France. Germany states that it “relies on European providers” and “systematically excludes untrusted technologies”. The Ministry later states that “recent geopolitical crises have demonstrated that technological dependencies pose a strategic risk”, and as a result, Germany is realigning its digital policy with a clear objective: achieving greater autonomy from “third-country technologies” and security through European cooperation and investment in key technologies. 

Overhaul of data access, introduction of data trustees, and exceptions for low-risk data processing - the Ministry plans to introduce “a legal right to open data” and establish “data trustees” to support data sharing. Moreover, the Ministry promises that the data protection law “will be fundamentally restructured” to move away from fragmentation and overregulation toward clear, consistent, and practical rules. As part of this reform, Germany aims to allow exceptions for low-risk data processing, cut unnecessary reporting requirements, and lower consent barriers (!).

“Made in Germany” cloud solutions - the Ministry also states that it will prioritize the development of a high-performance “national cloud” infrastructure to support “Made in Germany” cloud solutions and digital sovereignty. 

Telecommunications network accelerationism and no more 5g protests - the Ministry states that a central tool for accelerating network expansion will be the new Telecommunications Network Expansion Acceleration Act. The legislation will be designed to “reduce bureaucratic hurdles”, classify fiber and mobile network projects as overriding public interest, and streamline approval procedures,  including mandatory digital application channels and default approval mechanisms.

"Market before state" in 5G and public funding for "white spots" - the Ministry will also aim to improve the conditions for expanding fiber-optic networks and 5G through targeted measures and to strengthen competition. Legal simplifications led by a guiding principle “market before state” and private investment will be supported through appropriate regulatory frameworks and allocation of public funding to cover "white spots’" where market-driven expansion falls short (e.g. sparsely populated areas).

Cutting red tape - among other good things, the Ministry wants to reduce reporting requirements for businesses, as well as cut 20% of federal administrative regulations (!). Overall, the KPI for cutting bureaucratic costs for businesses is 25%.