Schwerin under pressure: Budget lock due to 8 million euros deficit!

Schwerin under pressure: Budget lock due to 8 million euros deficit!

In Schwerin, the red pencil is set again: the city's financial situation has deteriorated dramatically, with a forecast for 2025, which shows a minus of five million euros instead of the previously expected plus of three million euros. Mayor Rico Badenschier (SPD) announced that it would impose a budget lock on July 16 that drastically limits the city's financial scope for action. The current expenses may only take place according to the provisional housekeeping, which means that only the mandatory services and contractual expenses may continue to be rewarded. Voluntary services, in particular in the areas of culture and sport, are frozen at the current level, such as [nordkurier.de] (https://www.nordkurier.de/regional/schwerin/acht-million-euro-weniger-in-kasse-Oberbuerberister-Verhangengt- Hausstarrre-3759176).

The causes of the tense financial situation are complex. Rising tariff costs for the public service staff, increased expenses for childcare and high costs in the area of integration assistance and youth welfare contribute significantly to this. Mayor Badenschier also criticizes the underfunding of the municipalities, which is reinforced by tax relief without corresponding financial compensation. These developments are part of a larger trend that is heavily burdened by the municipalities in Germany, as can be seen from the Difu: A record deficit of 24.8 billion euros is expected.

tense budget in Schwerin

Schwerin's budget was already under pressure in the previous year when the financial administration predicted a deterioration of over 27 million euros. At that time, Badenschier also had a budget lock, which included strict regulations on the expenditure control. Part of the problem are the increased interest rates for loans that make up 4.1 million euros alone. Other factors, such as the tariff increases in the social and youth area, also burden the budget with around 11 million euros. The city is faced with the challenge of developing savings in the amount of 8 million euros in order to stabilize the financial situation, as the city administration on its website Schwerin.de.

But not everything is cloudy: the city's investment projects remain unaffected by the budget lock and should be implemented as planned. This shows a certain level of optimism that the city will continue to invest in the future despite the financial challenges.

The big perspective

However, the financial situation of all municipalities is under a bad star. Only 17 percent rate their situation as "good" or "very good", while 36 percent of cities classify themselves as "poor". This shows that far larger cities and municipalities face similar difficulties. The assessments for the current financial year remain behavior and 44 percent of the municipalities fear a "very disadvantageous" development in the next five years. The disputes about necessary changes in local financing therefore remain essential.

The coming time will be crucial for whether and how Schwerin and other cities in Germany can stabilize their financial situation. The pressure on the municipalities continues to grow and politics is required to find sustainable solutions.