Rostock's financial crisis: Eleven million euro deficit endangers salaries!

Rostock's financial crisis: Eleven million euro deficit endangers salaries!

There is a lot of rumblings in Rostock: the city is facing serious financial challenges due to a million dollar deficit. A hole of eleven million euros threatens to jeopardize the salaries of around 2,600 employees. Mayor Eva-Maria Kröger is sounding the alarm because the smooth payment of salaries for November and December, as well as the annual special payment, is in jeopardy. The citizens must agree to an over-scheduled payment on Wednesday, November 19th to prevent anything worse from happening. The fact that the budget planning for 2024 and 2025, with only 389 million euros for staff, is assessed as too low raises additional questions.

But how could this unfortunate situation come about? According to Kröger, the additional need is due to the ongoing collective bargaining negotiations as well as increasing cost shares for nursing care and health insurance, which were only identified during the 2025 budget implementation. These changes, coupled with a forecast that drew attention to the deficit in October 2023, are shaking the municipality's financial stability. In addition, the Komba and DBB civil service unions are calling for a transparent explanation of the causes and a strategy to avoid similar situations in the future.

Budget freeze and its consequences

In a very short time, a budget freeze was imposed, a tool that the city administration can use to minimize or stop certain expenditures when expenses exceed revenues. Such measures are intended to help stabilize the budget situation and maintain financial ability to act. However, this also means that new investments and projects have to be put on hold. Voluntary expenditure such as supporting sports clubs or renewing playgrounds is particularly affected. According to the NDR report, it is to be expected that citizens may have to forego offers, the city administration will take longer to respond to inquiries and fees and property taxes may also increase.

But doesn't the wheel of budget bottlenecks only rotate in Rostock? A similar picture emerges in Germany. The financial situation of many municipalities has deteriorated in the past year. Tax revenues are stagnating and important types of expenditure such as personnel and social costs are constantly growing. This was documented in the “Municipal Financial Report 2025” by the Bertelsmann Foundation, which highlights the worrying trends. The structural problems, especially with social spending, remain unresolved, which calls into question the municipalities' financial ability to act.

The worst forecasts suggest that Rostock's debts could grow to around 130 million euros by 2027, due, among other things, to exploding social costs. A deficit of 12 million euros is to be reduced, but the outlook for the future remains pessimistic: an annual deficit of 60 million euros is on the horizon in the coming years. The questions about a necessary nationwide state reform and clear financing responsibilities on the part of the federal government are urgent in order to secure the tasks of the municipalities in the long term.

Meanwhile, many voices can be heard in the political discussion. Sybille Bachmann from the Rostocker Bund and the SPD parliamentary group have also called for the missing additional requirements to be clarified and are offering support for the necessary additional expenditure in the personnel area. It remains to be seen how the situation will develop and whether the citizens can set the right example for solution-oriented communication and a sustainable financial policy next Wednesday.