Schwesig calls for federal help against impending tax losses in MV!

Schwesig calls for federal help against impending tax losses in MV!

The Prime Minister's Conference (MPK) was held in Schwerin on Wednesday, which discussed important financial regulations for the federal states and municipalities. Manuela Schwesig, the Prime Minister of Mecklenburg-Western Pomerania, called on the federal government to financially compensate for impending tax losses. She emphasized that the measures that are intended to support the economy, such as faster depreciation of investments, also lead to tax losses that the municipalities cannot cover. At the same time, Schwesig welcomed the emergency program announced by the federal government to stimulate the economy, which she believes is urgently needed.

How sueddeutsche.de reported, the Prime Ministers unanimously emphasized the need for strong federal support in the current crisis. They see the “investment booster” program as necessary, which, according to forecasts, could lead to reduced tax revenues of over 25 billion euros by 2029. This comes against the background that Germany is already in its third year of recession. North Rhine-Westphalia's Prime Minister Hendrik Wüst therefore called for a clear financing strategy to close the gap.

Specific demands from the countries

Schwesig is not alone in her demands; Anke Rehlinger, the Prime Minister of Saarland, advocates the introduction of mandatory natural disaster insurance to protect taxpayers from the financial consequences of natural disasters. She also calls for a rapid design of the special fund, which also benefits climate protection. In this context, Boris Rhein, Hesse's head of government, would also like to see more financial support from the federal government, especially for the states and municipalities, in order to expand their scope.

The Prime Ministers see it as essential that federal laws with financial consequences for the states and municipalities are automatically accompanied by additional funds. This is seen by many as the basis for a harmonious relationship between the federal and state governments. A letter from the CDU Prime Minister also points out the need for the causal connection, i.e. the connection between decisions and their financial consequences, to be adhered to.

Financial relief for municipalities

The federal government has already provided extensive relief for local authorities in the past. Like that bundesfinanzministerium.de documented, 5 billion euros have been made available annually since 2018 to strengthen municipal financial strength. This relief package includes, among other things, an increased federal contribution to the costs of accommodation and additional sales tax shares from the municipalities. There are also numerous programs to promote infrastructure that support particularly financially weak municipalities.

In summary, it remains to be seen what decisions politicians will make in this turbulent environment. An upcoming meeting between the prime ministers and Chancellor Friedrich Merz on June 18th could be groundbreaking for the financial situation of the states and municipalities and thus also influence the entire German economy.