The major cities in North Rhine-Westphalia (NRW) welcomed the federal government’s presentation of key elements for a solution to old debts, but they still consider these measures insufficient. Christian Schuchardt, Managing Director of the NRW Municipal Day, told the “Rheinische Post” (Wednesday edition) that while the federal government stepping up with assistance for old debts is an important signal, it is crucial that the entire amount of these supplementary old debt funds, totaling 164 million euros, reaches the municipalities in NRW without any deductions against state programs.
The leading association for local governments criticized the planned amount of funds. Schuchardt argued that the old debt relief planned in the federal coalition agreement, which is supposed to be implemented now, does not match the rapidly growing municipal deficits, which are accumulating new debts. He pointed out that the deficit in municipal budgets in NRW rose by 9.4 billion euros in the last year alone, marking a 37.5 percent increase compared to 2024. Consequently, the federal government’s announced old debt relief hardly amounts to more than a drop in the ocean, leaving its impact marginal.
For these reasons, the NRW Municipal Day has called upon the state government to provide immediate aid by raising the so-called association rate for municipalities in the Municipal Financing Law to 28 percent. This would allow the state-which has historically been able to generate surpluses-to transfer an additional 3.6 billion euros to the municipalities, thereby making a fair contribution to the municipal workload. Furthermore, the federal government should step in again to address the nationwide deficit of cities, districts, and municipalities. This could be achieved by increasing the share of the municipal contribution to VAT revenues.
