The federal and local governments will face additional personnel costs in the tens of billions as a result of the collective bargaining agreement.
(Photo: Reuters)
Berlin After the collective bargaining agreement in the public sector, counting began in the municipalities and at the federal level. “The collective bargaining agreement for civil servants is a major effort for us,” stated Mülheim’s HR department head Anja Franke and city treasurer Frank Mendack. There will be a burden on the Mülheim budget in 2023 and 2024 of around 20 million euros.
With a view to the costs, the compromise is certainly critical, according to the city of Osnabrück. But you also see it “as an opportunity to express the appreciation you have for our employees”.
The “most expensive wage agreement of all time” at around 17 billion euros is hitting the local authorities, which are already suffering from a difficult financial situation, hard, says the general manager of the German Association of Towns and Municipalities, Gerd Landsberg. “Here, the municipalities have to check to what extent fees may need to be increased in order to absorb the rising personnel costs in individual areas.”
The trade unions Verdi and the civil service association as well as Federal Minister of the Interior Nancy Faeser (SPD) and the Association of Municipal Employers’ Associations (VKA) had agreed on a collective bargaining compromise on Sunday night.
According to this, the 2.5 million employees will gradually receive a one-off payment totaling 3,000 euros by February 2024. From March, wages and salaries will then be increased by a flat rate of 200 euros and then increased by 5.5 percent.
The VKA had estimated the costs for the municipalities over the two-year term at 17 billion euros, of which around four billion for the inflation compensation premium only accrued once.
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If savings are not to be made now on urgently needed future investments on site, the federal and state governments have a duty to ensure that the municipalities have better financial resources in the long term, said Landsberg. “After all, each euro can only be spent once.” Especially the particularly financially weak municipalities would probably also have to discuss an increase in municipal taxes.
The local political spokesman for the SPD parliamentary group, Bernhard Daldrup, explained that cities and communities in a budgetary emergency are faced with higher personnel expenses, significantly higher interest payments and additional higher investment costs. However, eliminating or reducing funds for “voluntary” tasks in the areas of youth, leisure, culture and sport cannot be the solution here.
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Rather, the states would have to provide their municipalities with adequate financial resources, and the federal government should help by regulating old municipal debts, i.e. a haircut. But this is only possible with a reform of the constitution. “After years of debate in the Bundestag, the Union faction must face up to its responsibility and go along with the amendment to the Basic Law,” demanded Daldrup.
Relief is also desired in Mülheim. Together with the general price increases, especially in school construction, the collective bargaining agreement has a clearly negative effect on budget planning, says city treasurer Mendack.
In addition, there is the considerable interest rate damage that arose from the fact that there is still no old debt solution from the federal and state governments. “Therefore, it is now a particular challenge to avoid a budget freeze.”
However, the federal government itself will also face high additional expenditure. Interior Minister Faeser put the costs over the 24-month period at around 1.4 billion euros. According to government circles, the degree should also be transferred to federal civil servants. According to Faeser, the costs would be just under five billion euros. From 2025 onwards, the federal government will face additional annual costs of almost 3.8 billion euros.
A provision of almost 1.7 billion euros was made in the federal budget for 2023 for additional personnel expenses in connection with the collective agreement, said a spokeswoman for Federal Finance Minister Christian Lindner (FDP). “From the coming budget year 2024, the additional expenditures are to be estimated in the respective individual plans of the departments.”
The federal government is currently negotiating the draft budget for 2024. The ministers must therefore ensure that they take into account the burdens resulting from the wage agreement in their budgets and assert them accordingly with the finance minister. This applies above all to Defense Minister Boris Pistorius (SPD) because of the around 173,000 soldiers and Interior Minister Faeser because of the 54,000 women and men in the Federal Police.
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