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Red alert for MV: financial ability to act in danger!
Mecklenburg-Western Pomerania is facing financial challenges: The State Audit Office warns of the impending financial collapse and calls for reforms.
Red alert for MV: financial ability to act in danger!
In Mecklenburg-Western Pomerania there is a lot of trouble in the coffers: the State Audit Office is expressing massive concerns about the state's financial situation. President Dr. Martina Johannsen has sounded the alarm bells and warns of an acute threat to financial ability to act. This is happening in the context of the upcoming discussions on the double budget 2026/2027. After years of financial consolidation, the state government apparently sees no other way out than to abandon the recovered course.
Expenses are currently increasing rapidly, while income is only increasing slowly. According to Johannsen, red numbers are to be expected in the coming years, and not only the state government, but also the municipalities must expect a dramatic decline. The Court of Auditors is therefore calling for a rethink in financial policy: revenue should represent the upper limit of expenditure. Because without clearly defined prioritization and consistent consolidation of government tasks, solvency falls by the wayside.
Financial challenges and forecasts
If you look into the future, things will be bleak. A gap of around 3 billion euros is forecast for the years 2028 to 2030. There are no signs of recovery in sight and dependence on federal funds and EU subsidies remains high. Cuts seem inevitable, while tax developments remain rather subdued. There is no ray of hope here: no noticeable additional tax revenue is to be expected. There are also hidden burdens, such as future pension obligations, which add up to almost 10 billion euros.
The increasing social spending, which is expected to rise to 2.8 billion euros in 2026 and even to 2.9 billion euros in 2027, is also casting a shadow on financial developments. Personnel expenses are expected to exceed the threshold of 3 billion euros in 2027. At the same time, there is a risk of a decline in investments, which could fall to just 1.6 billion euros by 2027.
Reforms and the need for priorities
The use of loans to balance the budget for 2026 and 2027 creates additional risks. Reserves and loans must already be used to cover a short-term deficit of over 300 million euros in both years. Finance Minister Heiko Geue (SPD) tries to portray the state government in a positive light, but admits that the problems are huge. High social spending and a stagnating economy are pushing the state budget to the brink.
The positive news: The debt level was reduced by over 620 million euros and the 2025 stability report confirms compliance with the debt brake. But this might not be enough. The Court of Auditors calls for decisive action and a rethinking of state responsibility so that the financial scope does not collapse.
In addition to the financial concerns, the State Audit Office has published an updated version of its circular on the “proper use of information technology”, which regulates the requirements for documentation and the procurement process in the IT sector. This should also form the basis for an economic administrative organization and will be available in regularly adapted form, as shown on lrh-mv.de shown.
The coming period will show whether the state government will take the necessary measures to stabilize the financial situation. However, the signs point to a storm and without fundamental reforms it will be difficult to counteract the challenges of the financial year.