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The crash of Germany's online tax filing system left some 36 million property owners in the lurch. It is the latest embarrassment for a country that is routinely mocked for the woeful state of its digitalization.
The crash of Germany's online tax filing system has put Germany's digital dilemma in the spotlight yet again
Germany's only free, government-approved tax preparation software, Elster, crashed earlier this week. It was simply not able to handle hundreds of thousands of property tax returns filed in response to a government call for a reassessment.
Whether it's a lack of cell service even in the middle of cities, fax machines in doctors' offices, or a dearth of official services available online, there is near universal acceptance that Germany is stuck in the technological past.
Chancellor Olaf Scholz is seemingly unfazed. At the re:publica conference in Berlin, he laughed at the fact that Germans are having to wait for hours at city hall just to renew their ID cards. "I can't say exactly when that will change because I know how things go in Germany," he said.
A 2021 survey by the internet industry association Eco found that 71% of Germans are dissatisfied with the state of digital infrastructure across the country.
On the campaign trail last year, the business-friendly Free Democrats (FDP) promised to finally get serious about implementing a 2020 law called the Online Access Act (OZG), which stipulates that all administrative services must be fully online by the end of 2022.
Now, the FDP controls the Ministry of Digital and Transport as a member of the coalition government along with Scholz's center-left Social Democrats (SPD) and the Green Party.
Yet despite the party's position of power, a recent report from the German Economic Institute (IW) found that only 80 of 575 services are partially online, and a mere 35 are set to be fully online before January next year. Even that may be counted as a success, however, when one considers that the ratio is much worse when it comes to services offered by regional or local governments.
Moreover, the IW found that while in some places the number of services offered online increased from 2021 to 2022 — such as in the eastern state of Thuringia — in others they actually decreased. For example, in many municipalities in Germany's most populous state of North Rhine-Westphalia, local governments dropped online offers that had gone digital in 2020 due to the start of the COVID-19 pandemic.
Germany's Federal Audit Office has also cast doubt on how the rate of digitalization is quantified, accusing the coalition of padding the numbers by including things that are only partly online.
"The federal government is getting bogged down in developing overly complex digital solutions that offer no advantages to simple systems that already exist," the IW says, offering one possible explanation for the digital desert.
For example, their report says, the government insisted on introducing a blockchain-based ID for digital startups that has been plagued by functionality issues, even though the regular digital identification system that already exists would work just fine.
There are also those who blame lawmakers and bureaucrats for simply being too stuck in their ways for too long.
In 2013, former Chancellor Angela Merkel of the center-right Christian Democrats (CDU) was ridiculed both at home and abroad for calling the internet "Neuland" (unchartered territory). Hartmut Gieselmann, a tech writer for the industry magazine c*t, told broadcaster Deutschlandfunk that the CDU "slept through years, if not decades" of technological progress.
In the same expert roundtable, writer Eva Wolfangel added that there were also the issues of Germans' deep-seated resistance to spending too much money and a longtime obsession with balanced budgets. She said lawmakers and bureaucrats were more afraid of how much it will cost to improve digital infrastructure than they were concerned with how much more it will cost in the long run to postpone it.
Another cultural issue at play is a general distrust of technology, particularly when it comes to Germans' closely guarded privacy. "People in Germany are much more skeptical of technology than people in East Asia," for example, a study by the Otto Beisheim School of Management in Düsseldorf found.
"People from Germany overwhelmingly focus on the risks rather than the advantages," according to the report, which surveyed 700 people from five countries.
For Süddeutsche Zeitung technology editor Helmut Martin-Jung, federalism contributes stumbling blocks as well.
"The responsibility is fragmented between the federal, state and local governments," he wrote, with different organizations either refusing or simply unable to communicate with one another, working with a complex labyrinth of bureaucratic offices and rules that may overlap or contradict each other.
Some progress is, however, on the horizon. The FDP has recently pushed through a new plan to cover Germany in fiber optic cables — long commonplace in other countries — by 2030, which will drastically improve the country's sometimes dismal WiFi.
But again, the new strategy is already the subject of disputes between different levels of government as to who is responsible for which parts of the implementation and when they should be carried out.
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