Saxony-Anhalt's municipalities on the edge of the financial abyss!

Saxony-Anhalt's municipalities on the edge of the financial abyss!

In Saxony-Anhalt, the financial situation of many municipalities and districts looks anything but rosy. The level of debt has now reached dizzying heights. There are voices that speak of record levels of debt in cities like Dessau-Roßlau and the Anhalt-Bitterfeld district. The Association of Cities and Municipalities announces that the financing of the municipalities has actually failed. The lack of reforms to the Financial Equalization Act is constantly being discussed, while municipalities try to curb their spending, but often act half-heartedly, as MDR reports.

The economic conditions are anything but stable. Rising collective wages and rising material costs are contributing to the growing deficit. In addition, some creative solutions for household renovation do not seem to be fruitful. For example, Wittenberg is planning to host the state horticultural show, but financing remains uncertain. Financial uncertainties are also piling up in Dessau-Roßlau, where a Federal Garden Show is scheduled to take place by 2035. Costs of around 140 million euros are feared here, and no solution is in sight.

The oppressive debt burden

The numbers speak for themselves: As of March 31, 2024, the provisional debt levels of municipalities and municipal associations in Germany totaled 156.21 billion euros, of which cash loans made up a significant proportion, namely 122.47 billion euros. For comparison: In the previous year it was only 142.87 billion euros, which shows a significant increase, as published by Destatis.

The situation is not only worrying for Saxony-Anhalt: the state's debt level was 3.241 billion euros, while North Rhine-Westphalia tops the list with 57.828 billion euros. These figures shine a bright light on the financial challenges facing German municipalities. The unstoppable trend of increasing debt in recent years, caused by various crises, is also reflected in public budgets as a whole. While expenses have increased continuously since 1950, they have exceeded income in almost all years, underscoring the need for drastic reforms, as the Bertelsmann Stiftung points out.

Financial challenges and helpless measures

Finally, there are also dark examples: the Dessau-Roßlau clinic reported losses of around 60 million euros, while Anhalt-Bitterfeld runs an unprofitable maternity clinic and receives financial support from social security funds despite the demand for staff cuts. Austerity measures often do not seem to have the desired effect and the declining debts since 2019 seem long forgotten. Instead, the focus is on new debt to cover ongoing costs. Given this helplessness, the question arises as to how long citizens will tolerate this.

Overall, the debt situation in Saxony-Anhalt and many other regions represents a huge financial problem that can only be solved through a fundamental revision of political and financial strategies. It remains to be hoped that those responsible will respond appropriately to all of these challenges - after all, there is a lot at stake. A rethink is urgently needed.