The Federal Council is faced with a decisive decision on local financing!

The Federal Council is faced with a decisive decision on local financing!

On March 19, 2025, Gordon Schnieder, the CDU state chairman and top candidate, commented on the recently decided draft change in the Bundestag. This step is considered decisive for Germany's future security and is intended to address the financial challenges of the municipalities in particular. Schnieder emphasized the need for planned investments in infrastructure and defense measures to prepare Germany for upcoming challenges.

A central concern is to reduce increasing debts that are considered a long -term challenge for the state financial situation. Schnieder called for a comprehensive modernization of the state apparatus and the reduction of bureaucratic hurdles. These measures are intended to enable faster implementation of important infrastructure projects and thus reduce the financial burden on the municipalities through steadily increasing social expenditure.

urgency of the old debt problem

The problem of the old debts has manifested itself in many German cities, where there is an acute difficulty to make necessary investments. The federal government has responded to this situation: The Federal Cabinet has published a draft law that provides for a change in the Basic Law. This change is intended to help the municipalities to reduce their old debts, which amount to around 31 billion euros. This happens by the one -time takeover of 50 % of municipal old debts by the federal government, provided that the federal states fully defeat their municipalities from liquidity loans.

The main cause of the old debts are municipal cash loans that bridge short -term liquidity bottlenecks. The draft law provides for a new article 143h in the Basic Law, the entry into force of which requires a two-thirds majority in the Bundestag and the Federal Council. The deadline is December 31, 2023. It is also necessary that the countries ensure that no new municipal liquidity loans are built up.

role of the municipalities and the countries

Schnieder found that the implementation of the constitutional change in concrete steps of action is of great importance. He also asked the federal states to support their municipalities through planning imports and financial allocations. The German Cities Day emphasizes that municipalities that finance themselves from their own tax revenue and allocations depend particularly on better financial resources in order to be able to perform their diverse tasks.

The social and political importance of municipal tasks has increased in recent years. From social security to integration to education and public transport, the ability of the municipalities are indispensable. The financing of climate protection measures is an additional challenge that requires effective funding. The approach of targeting a nationwide equivalence of living conditions must be supported urgently.

On Friday there is a decisive coordination in the Federal Council. Schnieder is optimistic that the traffic light partners, especially the FDP, meet responsibility. Any abstention from Rhineland-Palatinate would be seen as a devastating signal to Berlin and could further tighten the already tense financial situation of the municipalities.