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Eastern states in the black - with western cash

The Local · 31 Oct 2012, 10:54

Published: 31 Oct 2012 10:54 GMT+01:00

The Handelsblatt newspaper reported on Wednesday that a Finance Ministry report showed the total debt of the states amounted to €4.2 billion at the end of September – €3.7 billion less than a year previously.

Half of the country’s 16 states are in the black, with Saxony leading the way – in total figures and per-capita rates. It showed a surplus of €1.4 billion, which works out as €349 per resident.

Saxony is followed in the per-capita finances rankings by three other former eastern states – Mecklenburg-Western Pomerania, Berlin and Thuringia. The first state from the former west is Bavaria in fifth place.

The figures are likely to reignite the debate about the financial transfer which still functions between western and eastern states, the Handelsblatt said.

The four top states in the per-capita surplus ranking receive between them two-thirds of the €7.3 billion that is redistributed from west to east, the paper said.

Berlin in particular relies on this money to keep its head above water, while of the net donor states, only Bavaria has managed to remain in surplus. Baden-Württemberg, Hamburg and Hesse are all deeply in debt, the paper said.

The continuing solidarity payments was briefly a topic this March in the run-up to the North Rhine-Westphalia state election, with the mayors of several cities in the Ruhr region complaining they were raiding their budgets to help eastern colleagues who did not need it as much as they did.

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A veteran Bavarian politician also took aim at the fiscal transfers in a book published this summer which called for independence for the southern state – at least in part to free it from the solidarity payments to the east.

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