Redistribution: Hesse’s Prime Minister dissatisfied with financial equalization


redistribution
Hesse’s prime minister dissatisfied with financial equalization

Hesse Prime Minister Boris Rhein.  The three southern federal states of Bavaria, Baden-Württemberg and Hesse are the largest

Hesse Prime Minister Boris Rhein. The three southern federal states of Bavaria, Baden-Württemberg and Hesse are the largest donors in the financial power balancing. photo

© Sebastian Gollnow/dpa

There it is again, the debate about the financial equalization of the federal states. Hesse, one of the largest donors in the system, is considering the lawsuit. “Few countries pay, many collect,” said Prime Minister Rhein.

Hesse’s Prime Minister Boris Rhein is calling for a redesign of the financial balance between the states and is also considering filing a lawsuit against it. “I think it is urgently necessary that we put the state financial equalization on the agenda and discuss the question of justice,” said the CDU politician to the editorial network Germany (RND). “Few countries pay, many collect,” said Rhine. That’s not a balanced relationship. “If the negotiations fail, the lawsuit is still an option,” said Rhein.

Bavaria’s Finance Minister Albert Füracker (CSU) announced on Thursday that the state government was already preparing a possible lawsuit before the Federal Constitutional Court. According to estimates by the Bavarian Ministry of Finance, the total volume of financial power equalization last year was around 18.5 billion euros – this sum was therefore redistributed between financially strong and financially weaker countries. The three southern federal states of Bavaria, Baden-Württemberg and Hesse are the biggest donors in the system.

Bavaria and Hesse had already sued in 2013

Bayern had – together with Hesse – in 2013 against the then State financial equalization sued. The two states then withdrew their lawsuit in 2017 after the financial relations between the federal and state governments had been reorganized.

Rhein also called for further negotiations on the costs for refugees. “We negotiated a lump sum with the federal government in late autumn 2022. However, we now see that we need a detailed settlement of all refugee-related costs with the federal government.”

In November, the federal government announced that it would provide 1.5 billion euros for 2023 to take in refugees from Ukraine, which was under attack from Russia. An annual lump sum of 1.25 billion euros has been announced for people from other countries. From Rhein’s point of view, that’s not enough: “We’re seeing such an influx of people that the lump sum won’t be enough. The Federal Chancellor has to accept that.”

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