Germany is able to fix problems in its public sector: France is not.

When Bundesbahn was in great trouble, a drastic plan to fix the problem has been scheduled in 1994. The debt was paid by the taxpayer but Bundesbahn became a "normal" business with "normal" salaries.

In France, today, Macron made recently the promise that the taxpayer will pay 35 billions € of the huge debt of 57 billions € BUT no change warrants the French taxpayer that the way the business is led no new debt will occur...

In the negotiation process with Unions, the French government is badly engaged. It put all its cards on the table and Unions possess an eraser to change the deal in a setting of punctuated strikes since weeks.
A very weak position to fix the issue of a business structurally generating a huge amount of debt. 



Lorsque la Bundesbahn a été en grande difficulté, un plan drastique pour régler le problème a été programmé en 1994. La dette a été payée par le contribuable mais Bundesbahn est devenue une entreprise «normale» avec des salaires «normaux».

En France, aujourd'hui, Macron a fait récemment la promesse que le contribuable paiera 35 milliards € de l'énorme dette de 57 milliards € MAIS aucun changement ne garantit au contribuable français que la façon dont l'entreprise est menée ne créera pas de nouvelle dette ...

Dans le processus de négociation avec les syndicats, le gouvernement français est très engagé. Il a mis toutes ses cartes sur la table et les syndicats possèdent une gomme pour changer la donne dans un cadre de grèves ponctuées depuis des semaines.

Une position très faible pour résoudre le problème d'une entreprise générant structurellement une énorme quantité de dette.




In December 1993, the railway reform bill containing alterations to the German constitution1 and five new laws and alteration of more than 130 existing laws and regulations passed by parliament. The planned reform process is shown in Figure 4 and can be characterized as follows:

(1) Foundation of German Railway Corporation
The German Railway Corporation DBAG was established in January 1994 absorbing the former DB and DR. The DBAG is a joint-stock company with shares owned by the state. As figure 4 shows the DBAG is subdivided into three divisions: tracks, passenger transport and freight transport. In addition to DBAG, two public-interest institutions were established. The Federal Railway Board will manage the state's responsibilities such as supervision, licensing, preparation of infrastructure investments. The remaining separate property—an institution comparable with the JNR Settlement Corporation in Japan—has absorbed all long-term liabilities of DB and DR as well as surplus personnel and will market the surplus real estate.
Flotation of DBAG shares on the stock market is not explicitly stated as an aim of the reform but is generally possible, except for the tracks corporation, which the amended constitution obliges the government to hold the majority of shares in.

(2) Vertical separation between infrastructure and transport
As Figure 4 shows, the three divisions (tracks, passenger transport and freight transport) will be established 3 years (5 years at maximum) after the foundation of DBAG as separate entities under the roof of the DBAG holding. The holding will be broken up another 8 years later. At that date, complete separation will occur between infrastructure and transport. In practical terms, this means that the tracks corporation will provide the tracks to transport companies on payment of usage charges and these transport companies compete for access to the infrastructure. This approach exceeds the obligations of the EC-directive 91/440 which requires only separation of book-keeping.

(3) Opening of the rail network to third parties
To meet the obligations of the EC-directive 91/440, the rail networks of all public railway companies in Germany—including the largest one of DBAG—will be opened to third parties. Third parties are defined as other domestic rail companies, international associations of EC rail companies and companies of combined transport services. Up to now, the EC-wide conditions for access and use of the rail infrastructure have not been formulated. The EC Commission submitted the first proposals for two directives in early 1994. One defines the criteria for unique permission to operate railway companies in the EC. The other deals with access to tracks in detail and with a calculation of the usage charges. Both directives are expected to be passed in the second half of 1994 and have to be adjusted to national law thereafter.

(4) Obligations of state regarding rail infrastructure
The track facilities are transferred to a tracks company which is obliged to run the lines on commercial principles and to put them at the disposal—on payment of usage charges—of users. The German constitution and the new Railway Construction Law lay down the following principles for financing infrastructure.
(a) The Federal government finances construction and replacement of lines. In addition, regional government or third parties can promote investment and the DBAG can also raise funds in the capital market to finance investment projects in which it is interested.
(b) The tracks company must bear the cost of operating and maintaining the lines.
(c) The tracks company must pay annual depreciation for lines financed by the Federal government, meaning that the Federal government finances the investments in advance and bears the interest. This rule only concerns projects in which the DBAG has confirmed a commercial interest. Otherwise, depreciation payments will be reduced or completely abolished. The tracks company has to pay both depreciation and interest for projects financed via the capital market.


(5) Measures for financial sanitation
The EC-directive 91/440 obliges all EC countries to provide a sound financial basis for their railways. To meet this requirement, the German railway reform contains the following financial measures.

• Transformation of all DB and DR long-term debts (about DM70 billion) to the remaining separate property to enable a fresh start for the DBAG from the very beginning
• Transfer of DB personnel (who have the special status of civil servants) to the remaining separate property
• The remaining separate property will loan these employees to the DBAG as necessary, but the DBAG will only pay such salaries as are usual in comparable trades and professions. The difference between these DBAG salaries and the salaries guaranteed for civil servants will be borne by the separate property. Additionally, the Federal government takes overall financial obligations resulting from special contracts with staff (pensions for civil servants). This arrangement provides considerable relief (estimated DM57 billion) from personnel costs.
• Balance-sheet adjustment (DM80 billion)
• Granting financial aid for additional costs for material and personnel caused by the old-fashioned production of DR (DM50 billion)
• Taking over necessary investments to meet DR backlog demand (DM30 billion)
• Financing construction and replacement of rail infrastructure (about DM70 billion)
• Regionalisation of suburban passenger transport of DB and DR




(6) Regionalisation of suburban passenger rail transport
The so-called regionalisation is a crucial point in the railway reform and shifts responsibility for both providing and financing services in suburban passenger transport to regional governments and communities, meaning that institutions demanding transport pay for it. This may seem to be a matter of course, but was not the prior case in Germany; up to 1994, regional governments requested suburban passenger rail services from DB and DR, but while DB and DR were obliged by law2 to provide these services, the regional governments were not responsible for paying for them. To compensate for losses, the Federal government granted special subsidies to DB and DR but these subsidies did not cover the costs. Thus, regionalisation means considerable financial relief for the DBAG.
The amended German constitution and Regionalisation Law allow regional governments and communities to receive part of the fuel tax to finance the suburban passenger rail transport.