"The German public has long been accustomed to Bavarian State Premier Markus Soder ruffling feathers with his remarks. The outspoken head of the conservative Christian Social Union (CSU) party often antagonizes his political allies as well as his opponents. This was also the case with his latest proposal, which occurred at the beginning of last week, when the CSU group in the Bavarian state parliament held a closed-door meeting in the picturesque Banz monastery north of Bamberg."
"For some time now, it has been clear that in Germany's "Landerfinanzausgleich" (fiscal equalization) system, whereby poorer states receive money from richer ones, only four states are donors: The economically strong southern states of Baden-Wurttemberg and Bavaria, Hesse, and the city-state of Hamburg with its profitable port. The other states are therefore somewhat dependent on these four. The current system is intended to help create approximately equal living conditions throughout Germany."
A proposal called for reducing the number of federal states from 16 through mergers, with larger units preferred and economic strength prioritized while Bavaria should remain unchanged. The plan emerged during a closed meeting of the CSU group at the Banz monastery near Bamberg. Germany's fiscal equalization system (Landerfinanzausgleich) currently has four donor states: Baden-Wurttemberg, Bavaria, Hesse and Hamburg. Those four paid more than €11 billion to the 12 less wealthy states in the first half of last year, with Bavaria contributing about €6.7 billion. Bavaria filed a constitutional challenge to the compensation structure in 2023.
Read at www.dw.com
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