The SPD Minister of Finance wants to remove the poor cities a part of their old debts. The Union rejects the. The Plan, however, is not unrealistic.

tram in Oberhausen photo: Ralph Peters/imago

BERLIN taz | Economically Germany is currently quite good. However, the prosperity is unevenly distributed between the Federal government, the länder and the municipalities. About 2,500 cities and towns are so heavily in debt that they must restrict services and can hardly invest. Federal Finance Minister Olaf Scholz (SPD) suggested, therefore, that the Federal government takes a part of the loads.

What is the Problem?

the bottom line is achieved, cities and municipalities in 2019, an increase of 6 billion euros. Some municipalities but suffer from high levels of social benefits, small trade tax revenue and interest payments for old loans. Most affected are the municipalities in North Rhine-Westphalia, Rhineland-Palatinate and the Saarland, for example Pirmasens, Ludwigshafen, Germany, two bridges, Oberhausen, Wuppertal, Hagen, Remscheid or Herne. According to the Association of cities, the crippling debt will be around 40 billion euros. Scholz's proposal: EUR 20 billion of the Federal government, 20 billion of the country does.

What are the arguments?

The conditions for millions of people would improve. City governments could invest more in kindergartens, public TRANSPORT, human resources, or housing. The debt relief would be like a stimulus program, which also serves companies and their employees. Germany could afford to pay this debt, because the General government debt ratio has fallen below 60 percent – not a problem. To spend more money could also drive the Inflation, and the savings allow interest rates to rise.

What speaks against the aid to the cities?

The debt brake in the basic law, the Federal government's borrowing is limited. Scholz can't pay just € 20 billion. With a two-thirds majority, probably the Bundestag and the Bundesrat would have to decide to be an exception, but the Union refuses. Furthermore, it is not done probably, the municipalities of old debt decrease. In order not to be again and again forced to take out new loans, they would have to bring their budgets are generally in order. Before this is not clarified, have the debt relief is no sense, say the critics.

Is the Scholz-Plan realistic?

The German Association of cities will find it is a good proposal, Union politicians disagree. Debt and Federal budget without new loans are in the Range of eternal truths. The SPD has dealt with the Union, but not the least concessions, and this also initially refused, so the basic pension without assets test. The municipal debt is now on the negotiating table – and is perhaps part of a compromise.