Topics: Bailout , Bertelsmann
Development of the municipal budget balance in 2007 to 2011 million euros. (Graphic: Bertelsmann Foundation)
The Ruhr Oberhausen has debts of 1.8 billion euros. This makes it the most indebted city in Germany. But by far not the only one. "The financial situation of many municipalities escalates dramatically," writes the Bertelsmann Foundation in its municipal financial report.
The financial situation is so tense that the municipalities are offset almostparalyzed with shock. Around 50 to 60 of the municipalities with around ten million inhabitants are so deeply in debt that they "are scarcely able to act," says René Geissler, municipal expert at the Bertelsmann Foundation. The total debt has increased from 2007 to 2011 from 111 to 130 billion euros.
On its own, the municipalities can no longer get out of this situation. The debt from the cash advances are a dangerous level increased (from 29 to 44 billion euros).
The Bertelsmann Foundation writes:
"The cash advances are the symbol of the increasing incapacity of cities and towns, as well as cash advances with increasing the space for investment loans and thus construction and maintenance of roads, school buildings and other urban infrastructure is close"
As a result, the gap between rich and poor communities increased. Especially bad is the situation in North Rhine-Westphalia, Rhineland-Palatinate, Saarland and Hesse.Saxony, however, has relatively good gewirtschaftet.
Given the low interest rates, the financial position of the municipalities could look worse. Higher taxes, fees and taxes are already on the horizon for the citizens in the affected areas.
A debt brake at the local level is for regions such as Oberhausen too late. Experts believe that the federal government must intervene with cash infusions. Shortly after the election, it could be so far.
German Economic News
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