Berlin Federal Finance Minister Christian Lindner has proposed an amendment to the Basic Law in order to relieve highly indebted cities and municipalities. “We must now excuse the municipalities affected so that there is scope for investment,” said the FDP politician to the newspapers of the Funke media group. “Time is of the essence, because the turnaround in interest rates will also affect cities and communities.”
According to the report from his ministry, one of Lindner’s conditions for this was an amendment to the Basic Law. It must be prevented that the municipalities immediately accumulate new debts after a one-off debt relief. According to the Funke report, there is an offer that the federal government will assume half of the cost of debt relief.
An amendment to the Basic Law would not only require a two-thirds majority in the Bundestag, and thus the approval of at least parts of the opposition, but also in the Bundesrat. There are indebted municipalities in all federal states, but not all regions are equally affected. Especially in North Rhine-Westphalia, Rhineland-Palatinate and Saarland, the municipalities have high cash advances. In other states with less heavily indebted municipalities, such as Baden-Württemberg, there has already been resistance to the coalition’s corresponding considerations.
The project is laid down in the coalition agreement between the SPD, Greens and FDP: “As part of the federal-state financial relations, we want to help the municipalities solve the old debt problem,” it says. The relief idea is a suggestion by Chancellor Olaf Scholz (SPD) from an earlier time. However, he had already failed as finance minister under Angela Merkel (CDU) in 2020 due to resistance from the Union and several federal states. FDP federal politicians were also critical at the time.
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Lindner comes from North Rhine-Westphalia, where many municipalities are heavily indebted and where a new state parliament will be elected next Sunday. The Prime Minister there, Hendrik Wüst (CDU), said in a government statement in November that his state government was ready to make “an appropriate contribution” to solving the old debt problem. At the same time, he advocated helping the municipalities structurally with the social burden.
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