North Rhine-Westphalia’s Prime Minister Armin Laschet (CDU) only wants to support the economic stimulus package planned by the federal government if it provides massive aid to the ailing municipalities in Germany. “I cannot imagine an economic stimulus package without a rescue package for the municipalities,” Laschet told SPIEGEL.
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“The already tense situation in many municipal budgets in Germany and North Rhine-Westphalia is exacerbated by the corona crisis.” Actually, the municipalities in particular, as the largest public investors, could strengthen local handicrafts and the economy in the area. “The economic stimulus package will therefore only be effective if it relieves the municipal budgets in the long term. The economic stimulus package must be a strong rescue package for the municipalities in Germany.”
Dispute over car premium and child bonus
Laschet thus increases the pressure on the federal government to present a big hit at the coalition committee meeting scheduled for Tuesday. Union and SPD are planning an economic stimulus package that is said to be worth over a hundred billion euros. The grand coalition wants to prevent a total crash of the economy and thereby support companies and households, but also culture and the catering industry.
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Large parts of the package are still controversial, between the coalition partners as well as between the CDU and CSU. The wrestling is about an automobile bonus and a children’s bonus for families. Important Christian Democrats are skeptical about the question of whether the federal government should jump aside the municipalities. Many in the Union categorically reject the assumption of old debts. The SPD has long been calling for a rescue package for the municipalities.
Relief for the municipalities as a goal
Laschet now sees the federal government as a duty, especially with regard to social burdens. “They are an essential, structural cause of the municipal financial shortage and thus also the old debts of many municipalities that have grown over decades,” he told SPIEGEL. He called for “a significant relief in the cost of accommodation”. The federal government is laying down the legal framework for this and, not least because of this, is also obliged to “significantly increase its share of financing”.
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Laschet emphasized that in this way the problem of old debts could also be tackled. “In many cases, an amendment to the Basic Law is considered necessary,” he said. “But other ways, for example via a federal contract administration, are also conceivable. What is important is the goal: structural relief for the municipalities.”
The economic stimulus package is seen as another important milestone in combating the consequences of the corona crisis. Vice Chancellor Olaf Scholz (SPD) wants to present to the coalition committee according to SPIEGEL information an extensive catalog, which also includes the expansion of short-time allowance and a bonus of 300 euros per child. The coalitioners have agreed to meet on Tuesday afternoon. Negotiations are expected late into the night on Wednesday.
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According to information from the “Welt am Sonntag”, the SPD wants to enforce a “protective shield for municipalities”, which provides for the takeover of old debts by the federal and state governments. “The municipal solidarity pact aims to enable cities and municipalities to get through the crisis well and to continue to make the necessary investments,” Finance Minister Olaf Scholz told the WamS.
According to WamS information, the Union wants to present a counter-proposal, instead of assuming old debts, municipalities should receive numerous other aids. In future, the federal government is to assume three-quarters of the “accommodation costs” for the unemployed instead of half, thus relieving the municipalities of four billion euros annually. In addition, the federal government should commit to its share of trade taxes this and next year, which would bring the municipalities 1.5 and 1.8 billion euros, respectively.
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