What the Berlin financial package for Hessen means

The financial package laced by Union and SPD in Berlin sounds promising for the countries and municipalities. But the Hessian state government reacted rather cautiously on Wednesday. Finance Minister Alexander Lorz (CDU) called the suggestions “remarkable”. In the federal government, people think that the challenges that Germany faces should also “be tackled courageously in the countries and on site in the municipalities”.

Lorz did not want to give a final assessment of what the proposal for Hesse means. But after his experts had expected late into the night and expected the whole morning, he dared to assess an initial assessment. “If you are based on previously common mechanisms, such as the distribution of federal funds according to the population, Hessen and its municipalities from the special fund of infrastructure could benefit over a period of ten years a year over a period of ten years.”

In the only one page comprehensive “result from the probing negotiations of the CDU, CSU and SPD”, specific purposes are listed: “Civil and population protection, transport infrastructure, hospital investments, investments in the energy infrastructure, education, care and science infrastructure, in research and development and digitization”.

In addition, there is the planned loosening of the debt brake. According to the formulations of the negotiators in Berlin, it is “concretized in such a way that the federal states will enable annual new debt of 0.35 percent of gross domestic product in the future”. Lorz sees it the “equal treatment of the countries with the federal government in the debt rooms”. According to his estimate, she could enable Hessen to be debt of “just over a billion annually”. “This does not mean that this scope has to be used,” said the Union politician.

But having the opportunity is certainly in the spirit of the country. “I have always been and I am still an advocate of the debt brake, but I have always supported opportunities such as equality with the federal government.” The challenges that the countries would also face did made this necessary. The equal treatment is also appropriate, especially since the federal government has additional debt scope for defense spending. In times of recession, Hessen is still facing “considerable consolidation requirements”. The taxpayers' money should not be spent lightly. “I therefore strongly warn against arousing new desires here,” said Lorz.

Prime Minister Boris Rhein (CDU) said that the country is in the middle of many simultaneous crises. “Massive investments in our security, in our defense and also in our infrastructure are necessary.” An ambitious economic policy is a geostrategic prerequisite to strengthen and defend Europe from the middle.

Michael Rudolph, the chairman of the DGB Hessen-Thuringia, was confirmed in his criticism of the debt brake. However, he said that the intended special fund was not sufficient to completely eliminate the investment backlog in the country and in the municipalities.

In daycare centers, schools and universities alone, there is an investment backlog of 130 billion euros nationwide. There would also be other gaps, for example in the transport infrastructure. “Therefore, the exact distribution of the funds from the special fund between the local authorities should be considered again.”

In addition, according to Rudolph, it must be ensured in the long run that the municipalities and countries could invest to a sufficient extent: “The planned extended freedom of maneuver helps the federal states in the debt regulation, but it is not sufficient.”

Social Democrats and opposition held statements on Wednesday. The politicians are better familiar with the concept of special funds in Hesse than in other countries. The former black and green state government used this financing instrument to mitigate the financial consequences of the Corona crisis.

The finance minister should be able to access a total of twelve billion euros over several years. The Hessian State Court rejected this breakthrough of the debt brake because the so -called reason for reason was missing. The money was not planned specifically for emergencies triggered by the pandemic, but for example for bicycle stands and lights on bike paths.