Fight against old debts: Action alliance turns to Berlin
25.03.2022 – Many cities and municipalities are still struggling with old debts. At the same time, the challenges are growing and are being exacerbated by coronavirus and the war in Ukraine. So what can be done to increase spending on social services when revenues are falling at the same time? To fight against this structural deficit and for adequate funding, highly indebted cities have joined forces in the cross-party action alliance "For the dignity of our cities". The alliance met in Berlin on March 17 and 18, 2022. City Treasurer Martin Wilhelm attended on behalf of the city of Offenbach.
40 representatives of "For the dignity of our cities" were guests at the Federal Chancellery, the Ministry of Finance and the Bundestag. In all discussions, they made it clear how urgently the unfair distribution of finances needs to be rectified and that this cannot wait despite the current crises. The municipalities are the enablers in the state. The particular challenges of recent years - taking in refugees from Ukraine and 2015/16, coping with the coronavirus pandemic - were all solved at municipal level. The cities and districts have always gone the extra mile, even though they are suffering greatly from the consequences of unfair financial distribution.
"The fight for financial justice may sound somewhat abstract. But what does it mean for Offenbach? By assuming debt from the federal government, Offenbach would be able to save three million euros a year in interest and repayment payments. Money that we could urgently use. During the two days in Berlin, we were able to put across important messages and demands. Now is the time for action. Because we cannot allow any more time to pass," says City Treasurer Wilhelm. The short-term support and accommodation of refugees from Ukraine is now another challenge that the city must tackle. "We are currently doing everything we can to offer people a perspective after the difficult flight. But here, too, we are of course dependent on support, because we won't be able to cope with this on our own in the long term. We were able to make this urgency very clear," continued Wilhelm.
The head of the Federal Chancellery and the State Secretary in the Federal Ministry of Finance also had important messages for 8.5 million people in Germany. "You are knocking on our doors," said Wolfgang Schmidt, Head of the Chancellery, with regard to an old debt solution for financially weak municipalities. Carsten Schneider, Minister of State to the Federal Chancellor, explained that the aim was to "permanently strengthen the municipalities' own financial power". Werner Gatzer, State Secretary at the Ministry of Finance, assured the affected cities and districts that a federal solution for old debts was a high priority for the Ministry of Finance and that the federal government was prepared to make its contribution: "You have us on your side."
Position paper with three core demands
To ensure that this does not remain an empty promise, the campaign alliance "For the dignity of our cities" presented representatives from the federal government and the Bundestag with a position paper containing three core demands:
1) Reduction of old debts from liquidity loans and old housing debts of East German municipalities
2) Fair compensation for the costs incurred at municipal level because the federal and state governments oblige cities and districts to perform numerous tasks
3) A new funding policy for municipal investments that ensures that not only wealthy municipalities receive funding, but that financially weak municipalities in particular make progress as a result - for example in the future topics of climate protection, digitalization and education.
In its demands, the alliance referred to the coalition agreement, which holds out the prospect of a solution to old debts. "Now we hope that words will be followed by deeds," concluded Wilhelm.
The campaign alliance "For the dignity of our cities" has been fighting for adequate funding and a solution to the issue of old debts since 2008.