Community in need: billion -dollar hole due to investment booster threatens!

Community in need: billion -dollar hole due to investment booster threatens!

The talks between the federal and state governments on the financial relief for highly indebted municipalities ended in a round of negotiations with no result. The focus was on the framework of the planned investment program to strengthen the German economy. Finance Minister Lars Klingbeil (SPD) and Chancellor Minister Thorsten Frei were present at the meeting, as well as several prime ministers and state finance ministers. The next round of negotiations is already scheduled for Monday evening, so that the actors can quickly work on a solution. The aim is to create growth impulses and investment incentives to get the stagnating economy going back and to secure jobs, such as Radio Hochstift reported.

The discussion is primarily about a billion -dollar tax package that the Federal Government decided to relieve companies. Prime Minister Hendrik Wüst (CDU) unequivocally made it clear in the Federal Council that the federal states must not remain at the expense of tax failures. If the countries do not agree on financial compensation, several state bosses cannot agree with the tax package. It is expected that almost 50 billion euros are taken by the law, which will lead to a massive deficit in the coffers of the municipalities, such as ZDF today reported.

The concerns of the municipalities

The municipalities are currently under immense pressure. According to the German Association of Cities and Municipalities, deficits of over 30 billion euros nationwide have accumulated in the past two years. Financial cushions from better years have already been used up, and many municipalities are wondering how they can continue to meet their social and infrastructural obligations. The planned “investment booster”, which provides for additional tax advantages for companies, could still tighten the situation of the municipalities. Uwe Zimmermann, deputy general manager of the German Association of Cities and Municipalities, warns of an unprecedented decline in local finances and is clearly in favor of necessary compensation measures, so Tagesschau .

In order to cover the deficit of the municipalities, a double -digit billion amount would be necessary, according to Zimmermann. It continues to demand a higher proportion of sales or income tax income for the municipalities to reduce their investment deficit of around 190 billion euros, which focuses on public infrastructure, schools and leisure facilities. If the necessary funds are missing, this could not only burden the infrastructure, but also endanger social cohesion and lead to increased dissatisfaction.