Sunday, August 17, 2014

Financial equalization Söder wants to put federal states under financial supervision – FAZ – Frankfurter Allgemeine Zeitung

Financial equalization Söder wants to put federal states under financial supervision – FAZ – Frankfurter Allgemeine Zeitung



                          Bavarian Finance Minister Markus Söder in shaping of two-euro coins showing the Neuschwanstein Castle.


Bavarian Finance Minister Markus Söder (CSU) demanded payment in exchange for any intra-German assistance, the introduction of a Financial for indebted states. During the negotiations on the reform of the financial relations between the federal and state provides Söder harsh conditions: Without a restructuring of the fiscal equalization it would “be no overall agreement,” Söder told the news agency dpa


The countries concerned must submit a binding debt repayment plans. “It is very important that the Stability get sharp teeth. We imagine that not only funds will be distributed as in the European fiscal pact. It must also be monitored their use, as does the EU Troika on the European level. “


The Stability Council is a body of federal and state governments, which was established with the federalism reform. The central task of the Stability Council is to regularly monitor the budgets of the federal and state governments. Impending budgetary crises should be detected early in order to take prompt countermeasures.


In July, at the working level negotiations on the reform of the financial relations between federal and state governments began. End of this decade run from both the countries financial compensation and the solidarity surcharge. Bayern currently charged with four billion euros half of fiscal equalization, Berlin, with an annual subsidy of three billion the largest recipient. Bremen and Saarland had already called in July, continue to use the proceeds from the solidarity surcharge on debt “preloaded” countries.


                                                                                              Who gives, who takes?
                                                                                      financial equalization: Who is the one who takes ?





The prime ministers of the countries and German Chancellor Angela Merkel (CDU) had agreed on a timetable for the talks. Accordingly, the Treasury will submit first reports until mid-October and early December. In the first package, it will go to the revenue sharing between federal and state governments, the second between the countries themselves. A central point will be the future use of the surcharge. The revenue of around 14 billion euros annually flowing far to the federal government alone. Countries will benefit directly if the solidarity pact expires in 2019. Is discussed, and turn over the money from the surcharge on income tax to the country, or so
to feed a fund that will pay off with the most cash-strapped countries their debts.


On Saturday the recipient countries had made it clear in the financial compensation that they line up for the upcoming discussions. Mecklenburg-Vorpommern Finance Minister Heike Polzin (SPD) said that recipient countries have their own working groups and were the beginning of September to submit an interim report. She made her displeasure with “the permanent actions from the south” clearly. “There must be a cohesive financial equalization in the future. And that is: The Strong helps the weak “


Söder hand, wants to pay less for the other provinces. “If some countries think that they can only change the federal-state financial relations and use the federal budget to pay off their old debts, without also reorder the fiscal equalization, then this will not work with Bayern,” Soder said. “In addition, there must be not only a scheme to pay off old debts, but these countries must make clear how they want to reduce their debt burden. We need binding debt repayment plans of the countries. “


For the German capital Berlin, the federal government should take the brunt of expenditure, called Söder – “because Berlin has many capital-related expenses. That would relieve the financial equalization massively. “


In contrast to several of his colleagues Söder will not decompose into individual points that negotiations: “Everything is connected to everything. There will be no isolated individual case control. We should take the opportunity for a big hit. “


to convey tried the Prime Minister of the donor country Baden-Württemberg, Winfried Kretschmann (Green). It calls for a willingness to compromise. In the discussions it was necessary to resolve fronts, said the acting chairman of the Prime Ministers’ Conference of the news agency dpa in


Baden-Württemberg will thereby ensure that the overloading of the donor countries will mitigated. On Negotiating no way leads past – even if is currently pending a suit of Bavaria and Hesse against the financial equalization at the Federal Constitutional Court


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“If those who complain now, think they have already won, I think this is highly ventured, “Kretschmann said. The court will see the whole thing – and ensure solidarity among countries. “The competitive advantage of countries that are already financially strong now, is significant,” he said. There is in Germany still a huge gap – from south to north, from west to east. “The control force in Saxony is one-seventh per capita in comparison to that in us,” Kretschmann gave an example. “Conversely, I say: It makes no sense to weaken the donor countries.”


“Baden-Württemberg can on a old debt redemption fund have no great interest. Finally, we already pay excessively in the financial equalization one, “said Kretschmann. “Other countries that are heavily indebted as the Saarland and Schleswig-Holstein, which look different, of course.” In the end it will be but hopefully good compromise.


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financial equalization

Söder wants individual states with financial questions


How much money must the rich provinces pay for the poor? The dispute is fierce. Bavaria’s Minister of Finance Söder calls for more supervision of the Federal indebted countries – as in the euro zone.

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