Household lock in Schwerin: Financial crisis forces economy!

Household lock in Schwerin: Financial crisis forces economy!

In the city of Schwerin, worrying financial developments spread. The pressure on the budget is growing, and this prompted the city administration to introduce a budget lock on July 16, 2025. This lock means that from this date only legally required or contractually defined expenses may be made. Voluntary services are frozen to keep the financial scope tight. According to Schwerin-lokal.de, the main cause is a deterioration in the financial situation by around 8 million euros, which is particularly due to increasing social expenditure.

The financial department Silvio Horn has extensively informed the members of the main committee and pointed out the considerable challenges. He explained that the higher tariff costs in the public service as well as rapidly increasing expenses for childcare and integration assistance cause the deficit. The situation is even more difficult by the cost of around 9 million euros in youth welfare, although the number of cases has only increased moderately.

A look at the municipal financial situation

The concerns that take place in Schwerin are also reflected in other cities. Burkhard Jung, Vice President of the German City Day and Mayor of Leipzig, describes alarming feedback in a current flash survey. Fewer and fewer cities can compensate for their households, and many who have previously been financially stable are now in serious difficulties. According to staedtetag.de, personnel reduction and the unclear financing of important transformation tasks, such as the transportation, are big issues that prepare the cities of headaches.

The precarious financial situation has already led to many cities delete bus and train lines, which means returning in the traffic turnaround and endangers the future viability. Jung calls for a better cooperation between the federal government, countries and municipalities in order to make the laws more practical and thus reduce the additional resource requirements.

The numbers speak a clear language

The municipal finances in Germany are tense like not for a long time. In 2023, the municipalities recorded a deficit of 6.8 billion euros, the first since 2011. The expenditure rose by 12 % compared to the previous year, while the income only climbed by 9 % compared to 2022. This can be seen from current data, which tagesschau.de published). The increase in social expenditure is in the foreground, which amounts to 76 billion euros. Here, increased regulatory rates for civil allowance and social assistance as well as the support of refugees from Ukraine play an important role.

The cities are under immense pressure. With a constant increase in expenses and only limited space for increasing the income, the situation becomes increasingly critical. It remains to be hoped that the planned working groups will find solutions to relieve the municipalities at the state level, after all, further cuts must not be the only answer to these challenges.