Urban Summit Highlights Struggles in Budgeting for Municipal Governments
In a recent development, the Stuttgart city council has released a video highlighting the precarious financial situation facing municipalities across Germany. The video, shared via various social media platforms, was produced under the hashtag #Handlungsfähig and has gained attention from sixty mayors and mayors who draw attention to the dramatic underfunding of cities and communities.
Ralf Broß, the managing director of the city council, warns that soon, all cities will exhaust their superlatives for the current financial crisis. The crisis, according to Broß, has already been reached for many cities, and the limits have been reached for all.
The financial challenges faced by German municipalities, as highlighted by the Stuttgart city council and the municipal associations, are severe and growing. After ten years of surpluses, municipalities reported a €24.8 billion deficit in 2023, a figure that is expected to triple in 2024. This financial strain is exacerbated by mounting interest payments, expected to soar from €35 billion to potentially €100 billion in the next few years, depending on interest rates, as well as economic stagnation and industrial crises.
Municipalities are responsible for significant social spending, public services, and investments, but the federal budget does not adequately support them, intensifying their financial crisis. Specifically, municipalities face an investment backlog of approximately €215.7 billion, a 15.9% increase from the previous year, driven by deficits in road and transport infrastructure, school infrastructure, and civil protection.
The rising costs of construction materials and labor further worsen these challenges. Moreover, there is growing pressure to cut social welfare spending, which adversely impacts municipal budgets since they carry much of the social service burden.
In response, the city council is demanding structural adjustments from the state and federal governments. The municipal association's action #HandlungsfähigWerden aims to emphasize the need for quick financial and structural reforms from the state and federal governments. Access to this information about the video is available without a Staatsanzeiger subscription.
The video serves as a stark reminder of the challenges facing German municipalities and underscores the urgent need for action from the state and federal governments to address the financial crisis and provide the necessary support for municipalities to maintain infrastructure and deliver essential social services.
- The city council's video, which has gained attention from numerous mayors, highlights the need for structural adjustments in finance and politics, as municipalities face a significant deficit and struggle to deliver essential services due to underfunding and mounting debt.
- Amidst growing pressures in business and general-news sectors, the municipal association's video campaign, #HandlungsfähigWerden, calls for quick financial and structural reforms from the state and federal governments, emphasizing the crucial role of municipalities in maintaining infrastructure and providing vital social services.
