When the half-year figures were presented, the Deutsche Bahn (DB) Executive Board's description of the current situation was refreshingly clear. As if put under a magnifying glass, said Group CEO Richard Lutz, the European Football Championship had exposed DB's structural weaknesses. But what else could he say in view of punctuality rates of just 63% in long-distance transport, and derisive comments in the European press? The dilapidated rail network is also becoming an ever greater financial burden for DB, as more than 50 per of the half-year operating loss in the core business was incurred in the area of infrastructure. The fact that it has eroded faster than expected over the past five years, as Lutz admitted, does not help matters.

It is good that the Executive Board and politicians have finally pulled the emergency brake. The general refurbishment of the rail network began on the Riedbahn line immediately after the European Championship. This is intended to be a turning point. The German government has also vowed to put an end to cutbacks. In June, the first instalment of the billion-euro equity increase was transferred. In the fourth quarter, the new Federal Rail Infrastructure Expansion Act is to provide cash and profit-generating subsidies for maintenance work. In total, 60% more federal funds will flow into DB's finances than previously.

The problem is that the financing of the urgent general refurbishment is not yet secured for the long term. Following the Federal Constitutional Court's ruling on the Climate and Transformation Fund last November, the German government had to change its budget plans for the state-owned railway company again at short notice. In the 2025 budget, the billions of euros in subsidies could now also change to loans, in a debt-brake-neutral manner. This approach, which could however affect the highly indebted company's credit rating, is currently being scrutinised by the German government under constitutional law.

The next few years will be tough for everyone involved. Travellers will have to deal with thinned-out timetables and rail replacement services due to construction work. Meanwhile, the DB Management Board will have to learn to lead the group through the crisis without its most important profit source. Logistics subsidiary Schenker is going under the hammer this year. Given this situation, the German government would be well advised to not re-open the question of rail financing.