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Municipality in need: emergency aid urgently required for financial rescue!
The German Association of Cities warns of a dramatic financial situation for municipalities and is calling for emergency aid from the federal and state governments.
Municipality in need: emergency aid urgently required for financial rescue!
German municipalities are in a serious situation, as the German Association of Cities reports. The financial situation is considered dramatic, which prompted President Burkhard Jung to urgently appeal to the federal and state governments. The Prime Minister's Conference will meet on Thursday to decide on urgently needed emergency aid. Quick action is necessary as many urban budgets are already reaching their limits.
The alarm bells are ringing because Jung points out the acute difficulties that affect not only the structurally weak southern federal states, but also the wealthy ones. “Urban budgets are collapsing,” he calls it. If the municipalities do not receive emergency aid, the situation could escalate and they would have to make use of emergency budget law. This would have far-reaching consequences, as without financial support, important subsidies that are not legally owed, such as for social work, sports clubs and city festivals, would be at risk.
Deficits at record levels
Due to the current situation, the municipal budget deficit could amount to over 30 billion euros in 2023. The numbers speak for themselves: municipalities bear around a quarter of the overall state expenditure, but only receive a seventh of the tax revenue. These disparities make it clear how urgently federal and state support is needed. The Association of Cities is not only calling for financial help, but also for a fundamental reform of the financial subsidy system.
The need for emergency aid is symptomatic of a broader challenge that affects many cities and communities in Germany. Many financial securities are jeopardized in part by the inadequate distribution of government funds. If no response is taken quickly, there is a risk of a bottleneck not only in local government, but also in the services that benefit citizens. The aim here is to promote cohesion in society instead of jeopardizing it through austerity measures.
Even though many eyes are on politics when it comes to urban finances, it remains unclear what the solutions should actually look like. While we wait for the results of the Prime Minister's Conference, it is important that everyone involved recognizes the urgency and looks for solutions together.