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.