A heated debate has erupted over the financial equalization of German states, with Carsten Schneider, the federal government’s commissioner for the eastern states, criticizing Bavarian Minister-President Markus Söder and the Christian Social Union (CSU). Schneider, a Social Democratic Party (SPD) politician, accused Söder of always following the same pattern: approving the financial equalization and then complaining about it afterwards.
According to Schneider, the current system favors states with strong municipalities, as only 75% of the municipalities’ financial resources are taken into account, not 100%. He also argued that the new mechanism, officially known as the Finanzkraftausgleich, introduced in 2020, has already benefited donor states like Bavaria.
Schneider emphasized that the financial equalization system is a cornerstone of a “solid federal state” and holds the country together. “Every person in Germany has the right to a good education and internal security, regardless of whether they live in the Uckermark or Munich” he said.
He also reminded that the financial weakness of eastern German states is a legacy of the German division, with few large corporate headquarters and correspondingly lower corporate tax revenues in the east. Schneider stressed that the solid equalization system has proven its worth and should remain in place, advocating for unity over egoism.