The 600 billion apparatus: Is the state eating itself up?
The 600 billion apparatus: Is the state eating itself up?
A gigantic personnel apparatus, astronomical pension burdens and an efficiency that lags miles behind the free economy. While the infrastructure is crumbling, record sums are flowing into administration. Is Germany heading for national collapse?
BERLIN – The numbers are so enormous that they go beyond imagination. If you add up the direct salary costs, the allowances in the event of illness and the exploding pension obligations, Germany is moving towards a sum that could devour almost half of the entire federal budget. Around 600 billion euros – that is the price for a state service that is becoming more and more of a nuisance for many citizens.
Stagnation on prescription
In the free economy, a merciless law applies: If you don't deliver, you disappear from the market. In the German state apparatus, the opposite seems to be the case. Despite advancing digitization (at least on paper), the number of employees in the public sector is growing inexorably towards the 5.5 million mark.
The problem: The perceived performance does not reach the citizen. Whether it's months of waiting at the office, dilapidated schools or a judiciary at the limit – the apparatus seems to be primarily concerned with itself. While companies focus on efficiency and streamlining, the administration continues to bloat itself due to ever new regulations and control bodies.
The two-class system in old age
The social explosive power of old-age provision is particularly explosive. While the average pensioner has to reckon with around 1,550 euros gross after 45 years of contributions, the world looks much rosier for the civil servant. An average pension of over 3,200 euros – financed 100% by taxpayers' money – cements a two-class community that is unparalleled in the free economy.
The bitter paradox: civil servants do not pay a cent into the pension insurance, but receive protection for which an employee would have to invest almost 20% of his net income privately.
The fortress of privileges in the Bundestag
Why is nothing changing? A look at the German Bundestag provides the answer. More than a third of the members of parliament themselves come from the public sector. Those who have grown up in the "civil servant system" and benefit from guarantees of return and pension entitlements rarely shake the foundations of their own fortress.
Conclusion: A reform is overdue
Germany affords one of the most expensive administrative apparatuses in the world without reaping the corresponding digital dividend. If the state does not learn to handle taxpayers' money as efficiently as a medium-sized company, the pension burden of the coming years threatens to crush the budget once and for all. The question is no longer whether we want to afford this apparatus – but how long we can continue to do so.
This is the point at which the gap widens and emotions are at their highest. The difference between the statutory pension and the civil servant's pension is massive – not only in the total, but also in the system behind it.
This is the point at which the gap widens and emotions are at their highest. The difference between the statutory pension and the civil servant's pension is massive – not only in the total, but also in the system behind it.
Here is the direct comparison (based on average values and the current pension level):
The "fairness check": pension vs. pension
characteristic | Employee (statutory pension) | Civil servant (pension)
Contribution | Pays approx. 9.3% of gross (plus employer's contribution) | Pays €0.00 (financed by the employer)
Max. level | Approx. 48 % of the average lifetime income | Up to 71.75% of the last salary
calculation | Sum of all remuneration points (45 years of work) | The last two years in the highest level countAverage
| Approx. €1,550 (after 45 years of contributions, gross) | Approx. €3,200 (after full service, gross)
Why doesn't anything change?
Contribution | Pays approx. 9.3% of gross (plus employer's contribution) | Pays €0.00 (financed by the employer)
Max. level | Approx. 48 % of the average lifetime income | Up to 71.75% of the last salary
calculation | Sum of all remuneration points (45 years of work) | The last two years in the highest level countAverage
| Approx. €1,550 (after 45 years of contributions, gross) | Approx. €3,200 (after full service, gross)
Why doesn't anything change?
There is a strong lobby of the status quo. Since many decision-makers in politics themselves come from the public sector (the so-called "parliamentary civil servant"), the interest in a radical reform – such as the payment of everyone into a single fund – is often politically unwanted.
Interesting fact: In an international comparison (e.g. compared to Scandinavia), Germany does not have the most civil servants per capita, but we have one of the most complicated sets of rules, which makes the administration extremely slow and expensive.
That's a pretty deep rabbit hole. If you look at the figures, it quickly becomes clear why the system seems so rigid:
The "self-administration" in the Bundestag
A major reason for the lack of radical reforms (such as the abolition of civil servant status or a single pension fund) is the composition of parliament.
- The "civil servants' Bundestag": Traditionally, a disproportionate number of members of the Bundestag are themselves civil servants or come from the public service (often over 30%).
- The privilege: Civil servants can take a leave of absence for their mandate. If they are not re-elected, they have a guarantee of returning to their old job. A self-employed person or employee in the private sector bears a much higher existential risk.
- Conflict of interest: Those who benefit from the system themselves or come from it are less likely to curtail their own privileges (such as pensions).
The comparison: economy vs. State
: In the free economy, inefficiency leads to bankruptcy. In the state apparatus, inefficiency often leads to... more personnel requirements.
Mistakes in the Free Economy = Bankruptcy / Unemployment Mistakes in the State Apparatus = File Note & Sitting Out & Reward
What would have to happen?
What would have to happen?
For years, many experts have been calling for three key points to tame this "apparatus":
- Paying everyone into pension insurance: So that the enormous pension burden does not fall solely on the taxpayer.
- Radical digitalization: So that simple administrative processes (registering a car, applying for a passport) work without clerks – as in Estonia or Scandinavia.
- Reduction of bureaucracy: Fewer regulations mean that fewer people are needed to control these regulations.
It is a mammoth task because the apparatus protects itself, so to speak.
Author: Guest article by Tom Weyermann
Source: Federal Court of Audit / Bundestag / Wikipedia
