• Germany's news in English

States split as Bavaria fights finance transfer

The Local · 17 Jul 2012, 11:03

Published: 17 Jul 2012 11:03 GMT+02:00

Facebook Twitter Google+ reddit

“With all solidarity, we have always made it clear – a transfer system within which Bavaria alone pays half of the total compensation for the whole of Germany, has run out of control and must be corrected,” State Premier Horst Seehofer told the Süddeutsche Zeitung.

Last year Bavaria paid €3.66 billion to poorer states – from a total of €7.3 billion which is transferred between states, a situation which Seehofer intends to challenge in the Constitutional Court.

Talks with the recipient states to set out a system where they volunteer to take less money, and put a cap on how much they could receive, have failed the Bavarians say.

“Despite intensive efforts, the other states were not seriously interested to implement reforms in the way things are dealt with,” the Bavarian state cabinet paper says.

The other donor states, Baden-Württemberg and Hesse, have supported Bavaria in its search for change, but do not seem to be in such a rush to head for court, the Süddeutsche Zeitung said.

“If the talks with the other states do not move anything along, we Bavarians have no option left other than the road to Karlsruhe,” said Seehofer referring to the site of the Constitutional Court.

His office said the official complaint would be submitted to the court by the end of the year, but that a decision would be unlikely before the state and national elections in autumn 2013.

Seehofer’s intentions infuriated his colleagues in other states. Erwin Sellering, state premier of Mecklenburg Western Pomerania said he had absolutely no understanding for it. He said Seehofer was again creating disharmony within the country rather than promoting solidarity ahead of the Bavarian state election.

“I find it is impossible if especially this state questions the solidarity within Germany and wants to stop the framework which has been agreed until 2019,” he told the Hamburger Abendblatt newspaper. He said that Bavaria had itself benefited from the transfer system for 40 years.

Schleswig-Holstein Finance Minister Monika Heinold said the current agreement was needed to enable states to reduce structural new debts to zero by 2020, but she said the system needed to be discussed – without going to court.

Story continues below…

Her counterpart in Bremen said she was not worried about the complaint to the court, saying the transfer was a legal right rather than a charitable donation. Bavaria had once been dependent on such help, but had seemingly lost an appreciation for how rich and privileged it was, she said.

The Local/DAPD/hc

The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

13:08 July 17, 2012 by michael4096
Germany was a federation of states with a common language created at a time when small states could not survive by themselves. A marriage of convenience - like Britain, Italy and others. One of the unexpected consequences of the EC has been to make these agreements less obviously convenient. Slovenia and Slovakia have shown the way. Scotland is heading for a referendum on independence. And, Germany ... ?
15:22 July 17, 2012 by IchBinKönig
Welcome to the EU. Where both the top 10% and the bottom 10% want to dissever. Its only a matter of time until war breaks out. Wouldn't be the first time taxation without representation was an issue.
16:36 July 17, 2012 by DoubleDTown
how about if Bavaria stops exporting its carpetbagger politicians and professionals? how aobut if Bavarian union members (e.g. the one that represents postal employees) accept the same hourly wage as their fellow workers in Saxony?
17:18 July 17, 2012 by neunElf
What I don't understand is, how you can force states to transfer money to "poorer" states, but then have no equalizing force be exerted on the consuming states to cut their spending.

This seems to be a great example of "moral hazard"!.
22:34 July 17, 2012 by finanzdoktor
Almost sounds like a microcosm for the EU: The poorer German states being countries like Greece, and the richer states being Germany. Interesting.
22:52 July 17, 2012 by gorongoza
I am no disciple of Seehofer but on this issue he has a point to make. If one looks at the reciepient states you may not be very surprised that they are not investor-friendly in many ways I would not here elaborate.
05:49 July 18, 2012 by ChrisRea
@ finanzdoktor

It would not be bad if what happens in Germany would be mirrored in the EU. Bremen and Saarland received bail-out funds in 1988, but Berlin's request for similar funds in 2006 was rejected. Miraculously, for the first time after the war, Berlin had in 2007 and 2008 a surplus of almost €100 million. Interesting, right?
15:14 July 18, 2012 by Jon123
EU --> Germany --> Bavaria --> Munich in the order of economic health and funding. In other words, EU--> Munich ... No wonder both living expenses & real estate is so damn high in Munich. :-P
22:36 July 18, 2012 by Struwel
Until 1986 Bavaria too got money. So it seems that Bavaria too was a poor state and who knows where they would be now if the then richer states had not helped them by paying money.
Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German towns, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd