Wealthy Bavaria gets €227 mln state payback

Germany's wealthiest state Bavaria is gaining millions in a federal funding after census results showed more people lived down south than previously thought, the business daily Handelsblatt reported on Wednesday.

Wealthy Bavaria gets €227 mln state payback
Photo: DPA

Ironically enough, Bavaria has led a recent campaign to kill off the system of Länderfinanzausgleich– state financial equalization – which redistributes some state tax revenue to smooth out differences between the nation’s richer and poorer states.

Over the last few years, this has led to millions being shifted northwards to poor states such as Berlin. But the redistribution depends on population, and new figures have changed the picture.

The 2011 census numbers show there’s been a considerably larger drop in the population of some states than others. As a result, states with much lower populations than expected are being asked to pay back money, while those with smaller relative losses – or even slight increases – are set to make monetary gains.

The money to be paid back relates to 2011 and 2012, while the 2013 funds are being allocated in line with the new population figures.

The biggest winner is Bavaria, long-term critic of the policy of state financial equalization, which is to get back €227 million, Rhineland-Palatinate (€203 million) and North Rhine-Westphalia (€130 million).

Berlin city state, on the other hand, will have to pay back €450 million, Baden-Württemberg €167 million, Hamburg €118 million and Saxony €9 million. All other states will receive more modest two-figure million sums back.

The Local/kkf

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Eastern German population dips to lowest level in 114 years

The number of people living in eastern Germany has fallen back to a level last seen in 1905, while more people now live in the regions that used to make up West Germany than ever before in history.

Eastern German population dips to lowest level in 114 years
Families visit the German-German Museum in Mödlareuth, Thuringia, eastern Germany, which was formerly divided by the inner German border, on Reunification Day 2018. Photo: DPA

This is shown by a new study on economic history by the Dresden Branch of the ifo (Information and Forschung) Institute.

Research shows that despite the reunification of Germany, which happened 30 years ago this year, the two parts of the country are “drifting apart, almost unchecked,” said Felix Rösel, the study's author. 

Rösel told The Local that the states which make up eastern Germany had 13.6 million residents in the year 1905 – the same amount expected in these regions by the end of 2019. 

READ ALSO: Why and how was the Berlin Wall built?

Meanwhile, the population of western Germany has more than doubled. It had 32.6 million residents in 1905 and is now expected to have 68.3 million people by the end of this year. 

“The enduring impact of the postwar division of Germany is something that the general public thoroughly underestimates, even today,” Rösel added. “This aspect is often overlooked and requires special political consideration.”

The study shows that had Dresden and Leipzig experienced the same growth as western Germany, they would now be twice as big. Some 550,000 people currently live in each of the two cities in the state of Saxony.

“Indeed both cities would have over a million inhabitants,” ifo researcher Rösel calculated. 

READ ALSO: Talkin' bout my generation: What unity means to eastern Germany

Mass exodus 

According to Rösel, the main reason for the population decline in eastern Germany is the mass exodus from the then East Germany between 1949 and the building of the Berlin Wall in 1961.

The Wall being built in August 1961. Photo: DPA

The study said that the migration towards the west after the fall of the Berlin Wall 30 years ago has also contributed to the “divergent population development in eastern and western Germany”.

In contrast, before the division of Germany some 70 years ago, eastern and western Germany had developed essentially in parallel.

READ ALSO: The east – west divide is diminishing but differences remain

As The Local has previously reported, almost one in five of the approximately 82.8 million people in Germany live in the former east, according to Federal Statistical Office.

However, whilst about five million more people live in the former west now than at the time of the “Wende”,  since 1989, the population in the ‘new' federal states and Berlin has fallen by about two million.

“While incomes and unemployment rates in the east and west are slowly converging, the population figures are drifting further and further apart,” Rösel said.

'Division has bled rural areas to death'

The report author said the focus should not only be on providing funding to major eastern German cities – but also to the countryside.

“The division of Germany has bled rural areas in the east to death,” he said. “An end to support for these areas would come as a particularly unfair double punishment.”

Rösel said that action was needed to bring communities together.

“We need exactly the opposite: we must promote social cohesion both in cities and in the countryside,” he added.