Cities desperate as €15-billion budgetary shortfall looms

Cities desperate as €15-billion budgetary shortfall looms
Photo: DPA
German cities and municipalities face a budgetary shortfall of €15 billion this year and have run out of ways to cut costs, they said on Monday.

“We’ve reached a point where we’re incapable of acting,” head of the DStGB communal association Gerd Landsberg told broadcaster Deutschlandradio Kultur on Monday. “And it’s not just a financial question.”

In the wake of the country’s worst financial crisis since World War II, cities won’t be able to cover the rising costs of social benefits if the federal government doesn’t step in with promised aid soon, he added.

One possible solution to quickly gain funds could be raising business taxes for the self-employed.

“We need to improve revenues,” Landsberg told the broadcaster. “That an only happen when the business tax is stabilised.”

An increases value-added tax, or VAT, could also be necessary, he said.

But privatising community services would be a bad idea, and has been rejected by voters as a possible solution, he added.

If citizens avoid taking political action against the controversial new federal austerity package, it will damage quality of life and lead to discontent, Landsberg alleged.

“We’re saying: This is so dramatic at the moment that local democracy is in danger,” he said.

Over the weekend up to 40,000 demonstrators gathered in Berlin and Stuttgart to protest the new budget.

The demonstration in Berlin had been called by an alliance of more than 100 groups including trade unions, The Left party and social pressure group Attac, under the banner “We’re Not Paying for Your Crisis.” But things there turned violent when two police officers were seriously injured by a homemade explosive.

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