German municipalities are facing a severe financial crisis, prompting the German Association of Cities and Municipalities (DStGb) to urgently call for support from the federal government and state authorities. DStGb President Ralph Spiegler emphasized the necessity of an immediate relief program to safeguard the operational capacity of local governments, describing it as “nothing less than a vital investment in trust within the state and our democracy.
Spiegler stressed the need for swift action from both the national and state levels, expressing hope and expectations regarding the planned “Future Pact for Germany” outlined in the coalition agreement. He urged for the rapid drafting and, crucially, the implementation of this pact, warning that core future-oriented tasks are at risk.
Specific demands articulated by the DStGb President include a critical review of expenditure on social services, with a plea for financial relief for cities and municipalities. He also advocated for increased digitalization and a reduction in bureaucratic burdens, asserting that these are essential for stabilizing the state’s future viability. Spiegler argued that efficient administration is no longer possible without digital processes and called for a streamlining of administrative processes and standards to ensure they are realistically achievable.
A recent Municipal Finance Report from the Bertelsmann Foundation highlights the gravity of the situation, revealing that German municipalities are projected to record a deficit of approximately €25 billion in 2024 – the largest deficit in German history.