A German state’s minister-president expects a new federal government to address the old debt problem of cities in the state.
The minister-president of North Rhine-Westphalia, Hendrik Wüst of the Christian Democratic Union (CDU), believes that a new federal government composed of the Union and the Social Democratic Party (SPD) will aim to solve the old debt problem of cities in North Rhine-Westphalia, following a speech by the CDU’s federal chairman Friedrich Merz in the Bundestag on Tuesday.
“Friedrich Merz has clearly stated that the framework for municipalities must change” said Wüst to the Westdeutsche Allgemeine Zeitung (Wednesday editions). “That means the political task is clearly defined: a clear concept for sustainable and viable financial relationships between the federal government, the states and the municipalities is needed. This includes a substantial solution to the old debt problem.”
Merz had previously argued during the debate on the federal budget that the municipalities in North Rhine-Westphalia would have to use 13 billion of the 15 billion euros in annual tax revenue for social expenditures, as prescribed by federal laws. “This cannot go on” said Merz. “If we want to give the municipalities in Germany more freedom again, we must change these statutory foundations.”
Wüst said that Merz had “very vividly described how the municipalities in North Rhine-Westphalia are being crushed by the immense social burdens.” The shifting of the costs for social benefits from the federal government to the cities had “led many municipalities, which had been severely affected by the loss of a hundred thousand times the number of jobs and had hardly any instruments to establish new jobs, into a debt spiral from which they cannot get out on their own” said the minister-president.
The new federal government must declare its commitment to taking over its part of the municipalities’ old debt, Wüst demanded. The cities along the Rhine and Ruhr rivers could only invest the funds from the special infrastructure fund in a meaningful way if there was a reliable way out of the “overwhelming debt trap” for them.