Why the SPD’s big old debt plan will fail

Olaf Scholz

The Chancellor held out the prospect of federal aid for debt relief for local authorities.

(Photo: AP)

Berlin A few days ago, Olaf Scholz (SPD) gave a speech to local representatives. At the annual meeting of the German Association of Cities, the chancellor justified why he wasn’t raising more money for the municipalities in the refugee crisis. So far, so to be expected. But then the Chancellor said something that made some of the audience sit up and take notice.

In this way, the federal government could soon support the federal states in the debt relief of clinging municipalities. “You know our willingness to find a solution,” said Scholz. “Now we are talking to all sides about how we can achieve the necessary majority.”

In fact, there has recently been movement on the topic of old municipal debts. Only: Many municipalities do not want help from the federal government. That’s not the urgent problem, says Hans-Günter Henneke, chief executive of the district council.

“I think a solution to old debts involving the federal government is wrong. We don’t need patronage like we did with old debts, but clear and reliable financing structures,” says Henneke.

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