The German Association of Cities and Municipalities (DStGB) welcomed the decision made by the Federal Council rejecting the so-called “relief premium” subsidy. According to André Berghegger, the DStGB’s chief executive, the federal proposal was deemed a “classic scheme conducted at the expense of third parties”.
Berghegger stated that the cities and municipalities in Germany are currently facing an existential financial crisis. He argued that, despite the high appreciation for the dedicated efforts of municipal employees, local governments would not have been in a position to afford such a premium. Therefore, he agreed with the Länder (federal states) raising concerns about potential additional revenue losses resulting from tax shortfalls impacting both states and local authorities.
The original federal proposal featured a tax-free bonus of up to 1,000 Euros provided by employers. The Länder successfully voted against this plan in the Federal Council.
