Agreement on economic package: Mecklenburg-Western Pomerania demands compensation!

Agreement on economic package: Mecklenburg-Western Pomerania demands compensation!

Today, June 13, 2025, important decisions are pending in the Federal Council. The planned economic package is being discussed for the first time and has met with broad approval, but also concerns. Mecklenburg-Western Pomerania signals support for the plans, but demands compensation for the expected tax losses that could arise from the planned measures. How NDR reports, the tax relief is intended to help companies invest and stimulate the economy.

The focus of the initiative is on creating better depreciation options. In particular, the reduction in the gastro tax and the increase in the commuter allowance represent important impulses. Prime Minister Manuela Schwesig (SPD) emphasizes the urgency of revitalizing the economy in Germany and at the same time calls for energy prices to be reduced. According to estimates, these measures could lead to tax losses of over 30 billion euros, which will affect states and municipalities. For Mecklenburg-Western Pomerania, this could mean a loss of around 140 million euros in tax revenue.

Financial challenges for municipalities

A central point in the discussions is the demand for financial compensation from the federal government. In doing so, Schwesig aims to plug the financial holes that will be created by the tax reform. Even though the tax relief is viewed as extremely positive in many federal states, there are concerns about how municipalities will be able to cope with the shortfall in revenue. Tax expert Tobias Hentze from the Cologne Institute for the German Economy emphasizes that the tax burden on corporate profits in Germany is around six percent above the OECD average, which makes the situation even worse Mirror reported.

From 2025 to 2028, a third of the relief (around eleven billion euros) will be borne by the municipalities, although their share of tax revenue is only 15 percent. This disproportionate burden could push smaller cities and communities in particular to the limits of their financial possibilities, which could lead to a further aggravation of the financial situation in the long term.

The path to agreement

The focus is now on the upcoming Prime Minister's Conference, which will take place next Wednesday with Chancellor Friedrich Merz (CDU). The states are calling for an agreement with the federal government before the summer break so that the legislative initiative can be voted on in the Bundestag on June 26th. A final decision from the Federal Council is expected afterwards.

The plans are ambitious and support from countries could be crucial. It remains to be seen whether the federal government is prepared to provide the required financial compensation. There is a lot to be gained from this agreement – ​​not just for companies, but also for municipalities and their citizens.