The CDU Economic Council has called for a new federalism commission amid severe financial problems faced by local governments-a topic currently on the agenda of the Prime Ministers’ Conference in Berlin.
Wolfgang Steiger, general secretary of the council, told Bayern’s newspapers that more and more municipalities are falling into acute financial distress. He blamed the heavy dependence on highly cyclical trade tax revenues. According to Steiger, this problem is structurally ingrained and must be addressed through a new federalism commission.
From the council’s perspective, the goal should be a clearer separation of responsibilities. “The tasks of the federal, state, and local governments need a more distinct distinction so that each federal level has clear duties and financial leeway” he explained. He added that the role of the state requires urgent reassessment: not every task must be carried out or financed by the state.
A second priority for the commission is to curb social spending. “In such a commission, it must also be taken into account that social benefits are increasingly taking up a larger share of municipal budgets” Steiger said. “Many of these expenses are legally mandated and cannot be reduced by municipalities on their own”. This argument supports a review of tasks and expenditures, and ultimately a cap on social spending overall.