The German Local Governments Association has sharply criticized the federal finance minister’s proposed plans aimed at alleviating the burden of legacy debts for local authorities, calling the measures entirely insufficient. While the association’s head, André Berghegger, stated that they welcome the coalition’s general commitment to supporting local governments in reducing old liabilities, he dismissed the anticipated funding-approximately one billion euros annually over the next four years-as practically meaningless, claiming it was “not even a drop in the hot stone”.
Berghegger pointed out that over the past two years, local governments have accrued a financing deficit amounting to almost 60 billion euros, and there is no sign of improvement. Consequently, he warned that the issue has moved beyond merely managing old debts; the significant deficits are escalating the threat of accumulating new debt. The association emphasized the urgent need for further support, specifically calling for the cost reductions for social service expenditures that were promised within the governing coalition agreement.