Municipalities in North Rhine-Westphalia and Rhineland-Palatinate in particular would benefit from the assumption of old debts. Resistance comes from Bavaria and Lower Saxony, among others. "Bavaria is already paying more than half of the federal financial power equalization, we are certainly not paying for the debts of the municipalities of other countries," said Albert Füracker (CSU), the Bavarian Minister of Finance.
Lower Saxony's Prime Minister Stephan Weil (SPD) referred to his state's own debt relief program. "If the federal government, together with the states and municipalities, is now on such a path, such advance payments must of course be taken into account," said Weil. His Finance Minister, Reinhold Hilbers (CDU), said: "Every level of government must solve its tasks and manage the budgetary framework responsibly." The assumption of the debt by the federal government is the "completely wrong signal".
The German Association of Cities is meanwhile urging the federal and state governments to come to an agreement quickly. "The interest rate risk is immense, it blocks the affected communities the opportunity for future investments," said Managing Director Helmut Dedy of the "Welt am Sonntag". Concerns are particularly great at the moment where old municipal debts are highest and are financed with short-term cash advances. "Now the federal government and the affected federal states must quickly come to a solution before interest rates continue to rise," said Dedy.
