Fiscal equalization should remain
Twelve federal states are defending themselves against the Bavarian lawsuit
08/29/2023, 8:20 p.m
The design of the state financial equalization has long been a thorn in Bavaria’s side. Prime Minister Söder is complaining. Now resistance is forming. Twelve federal states are taking action against the Bavarian defection. After all, it’s about billions. And about the “heart of common federal solidarity”.
Several federal states are opposed to Bavaria’s constitutional complaint against the state financial equalization. Twelve countries will join a process community, it said. Constitutional lawyer Stefan Korioth from the law faculty of the Ludwig-Maximilians-University in Munich is supposed to represent the states before the Federal Constitutional Court. The background is that Bavaria filed a lawsuit against the financial equalization with the Federal Constitutional Court in July. The Free State is calling for a new regulation, as it has been carrying by far the greatest burden in the equalization system for years.
Bavaria’s Prime Minister Markus Söder said in early July that Bavaria would need more money at home in the future. “Bavarian money is simply better off in Bavaria than in Bremen, Berlin or anywhere else.” One is and remains in solidarity, “but we are not naive”. The compensation system is now “deeply unfair”. Bavaria has already paid in more than 100 billion euros in the past decades and only received a good 3 billion euros. Other countries bought things that Bavaria could not or would not afford.
Ramelow: “Fatal wrong decision”
Thuringia’s Prime Minister Bodo Ramelow described Bavaria’s lawsuit against the state financial equalization as a “fatal wrong decision”. The financial equalization between the federal states is about a “heart of common federal solidarity,” said Ramelow in Apolda. The aim is that the existing equalization system between financially strong and less financially strong federal states, the so-called donor and recipient states, endures.
In addition to Thuringia, the states of Berlin, Brandenburg, Bremen, Hamburg, Mecklenburg-Western Pomerania, Lower Saxony, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt and Schleswig-Holstein also reacted with incomprehension to Bavaria’s actions.
Around 18.5 billion euros were redistributed between the 16 federal states last year. Bavaria paid in almost 9.9 billion euros. According to the statement by the Federal Ministry of Finance, Baden-Württemberg paid almost 4.5 billion euros, and Hesse paid 3.25 billion euros. Hamburg contributed around 814 million euros and Rhineland-Palatinate around 107 million euros.
Bayern jumps off again after commitment
According to the Federal Ministry of Finance, however, eleven countries benefited from payments from the compensation: Berlin was the largest recipient last year with around 3.6 billion euros. Lower Saxony received almost 1.8 billion euros, Bremen around 890 million. Brandenburg, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringia also received funds.
“Financial equalization is not an end in itself, but is intended to ensure equal living conditions and prevent entire regions from being left behind,” said Lower Saxony’s Finance Minister Gerald Heere. Most recently, the federal-state financial relationships were reorganized in 2020. “After Bavaria had agreed to the new equalization system, it is now giving up afterwards. That is the opposite of solidarity and reliability,” criticized Bremen’s Finance Senator Björn Fecker.