The CDU’s Economic Council has demanded a new federalism commission amid growing financial crises in municipalities-a topic that is also on the agenda at the current Minister-President Conference in Berlin.
Wolfgang Steiger, the council’s secretary-general, told the Mediengruppe Bayern newspapers that more and more local governments are slipping into acute financial distress. He blamed the high dependence on the highly cyclical trade‑tax revenue (Gewerbesteuer) and called the situation “structurally ingrained”. According to Steiger, a newly constituted federalism commission is the appropriate forum to address the problem.
From the council’s perspective, the commission’s first mandate should be to sharpen the separation of responsibilities. “The roles of the federal government, the states and the municipalities must be clearly delineated so that each level has well‑defined tasks and financial leeway” Steiger said. He stressed the urgent need for a state‑level task critique, arguing that “not every responsibility needs to be fulfilled or financed by the state”.
A second priority for the commission, as outlined by the council, is to curb social spending. “Social benefits are increasingly taking up a larger part of municipal budgets, yet many of these costs are legally prescribed and cannot be cut by local authorities alone” Steiger explained. He urged that the commission examine both the allocation of tasks and the overall scale of social expenditures, aiming ultimately to limit those costs while ensuring essential services remain protected.
