The prime ministers of Bavaria and Hesse, along with the CDU’s leading candidate in Baden‑Württemberg, have demanded a comprehensive reform of the Länderfinanzausgleich (inter‑state financial equalisation).
In a guest article for the Friday edition of the “Frankfurter Allgemeine Zeitung”, Markus Söder, Boris Rhein and Manuel Hagel argued: “While Berlin and Bremen keep their coffers open for new social benefits, the South must start saving”. They added that “the system must be fundamentally restructured-aid only in return for reforms”.
The trio also called for a “cap on the pressure placed on the donor states and clear reform incentives for the recipients”. They insisted that additional funds for recipient states be tied to measurable progress in regional development. “Those who perpetually live at the expense of others, without strengthening their own tax base, have misunderstood cooperative federalism” they wrote.
They described the status quo as a “one‑sided circle of redistribution”. Together, Baden‑Württemberg, Bavaria and Hesse supply more than 99 % of the total Länderfinanzausgleich. Therefore, anyone who bears nearly all the burden must be obliged to clearly articulate their interests and conditions.
Simultaneously, the three Union politicians demand that the states be granted the authority to set the real‑estate transfer tax and inheritance tax. “True subsidiarity requires genuine tax sovereignty” they argue. They warn that an inheritance‑tax increase, as the Left has called for, would be poison for the economy. Those urging tax hikes during the economic crisis should ensure that tax revenue does not evaporate, and they call for “tailored solutions close to the middle class rather than rigid standard models”.
