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Mayors sound the alarm: municipalities in financial crisis!
On November 3, 2025, the mayors of German cities are calling for more support against the municipal financial crisis, while Bavaria is presenting a relief package.
Mayors sound the alarm: municipalities in financial crisis!
In a worrying turn of events, 13 mayors of German state capitals today sent an incendiary letter to Chancellor Friedrich Merz. They are urgently demanding more support from the federal government in order to deal with the alarming financial situation of the municipalities. That's what she reports South German newspaper.
Public debt will reach a new record level in 2025. This does not leave the cities unscathed, as expenditure already exceeds income in many cases. Municipalities in Bavaria in particular are severely affected. For this reason, cities, municipalities, districts and districts are appealing to the responsible institutions in order to be financially relieved. Currently, many municipalities have to resort to reserves, sell properties and take out loans in order to make ends meet.
A challenge for the future
The financial situation is complex and characterized by constant give and take. However, an agreement between the Bavarian state government and the municipal associations has taken a step towards improvement. After Bayern.de The municipal financial equalization for 2025 will be increased to a total of 11.98 billion euros, which corresponds to an increase of 608.6 million euros compared to the previous year. Becker Lutz, Interior Minister of Bavaria, emphasizes that although these negotiations were challenging, they were characterized by mutual respect and emphasize the importance of sound municipal finances.
The key allocations in particular, which will increase by 408.8 million euros to over 4.85 billion euros, could be of great help to many municipalities. However, the financial resources should not only address the current challenges, but also flow into future investments. Among other things, 800 million euros are earmarked for hospital investments and 446 million euros for the investment allowance.
A look into the future
According to that Municipal financial report 2025 The deficit of the municipalities in Germany in 2024 could question the municipalities' financial ability to act. Weak tax revenues and uncontrolled spending in areas such as personnel, material expenses and social assistance are escalating the situation. Courts also raise the question of the need for state reform, because the tasks involved are often overwhelming.
The outlook for the coming years is not very optimistic. The inflation rates make financial planning for municipalities even more difficult. Many positions cannot be filled because the budget situation does not allow any flexibility. Board member Brigitte Mohn emphasizes that it is time to address the structural problems and give municipalities clear financial responsibility. Social cohesion in cities can only be secured with a strong commitment from the federal and state governments.
The challenges facing municipalities are not just financial. It turns out that social cohesion is seen as vital for the common good and appropriate support is necessary. The current budget consultations will show whether the announced municipal financial equalization and other aid will be sufficient to sustainably reduce the burden on municipalities.