In the corona crisis, the federal government made 2.5 billion euros available for cities and municipalities, one billion of which as co-financing for investments and one as a loan. This is not enough for many cities and municipalities, which is why the President of the Association of Cities and Towns Michael Ludwig (SP) demanded another billion “real money” from the federal government. Finance Minister Gernot Blmel (VP) did not rule out further support at a joint press conference with the Mayor of Vienna.
Ludwig was grateful for the federal government’s financial support, “but the demands of the city federation have not been met”. Only a third of the loan granted is money that does not have to be repaid. This is not a problem for Vienna and other financially strong cities, but “quite a challenge” for many others. It takes an extra billion “real money” that does not have to be paid back. The municipalities needed the money to secure their liquidity in 2022 as well. “We are concerned that the number of leaving communities will increase,” said Ludwig.
Blmel: No promise, but discussions
Blmel did not accept these demands on the stage, but he was at least open to discussions. “Politics is not over, we need constant discussions about political necessities.” They will look for solutions together, “the need for discussion does not work,” said Blmel.
In order to cushion the economic effects of the corona crisis, the Federal Government provided one billion euros for investments in the Municipal Investment Act 2020 (KIG 2020). At the end of June 2021, according to Blmel, EUR 740 million was paid out to 1,693 municipalities or municipal associations from the KIG 2020. This sum of grants is offset by supported investments in the amount of 2.8 billion euros. Most of the disbursed volume went to Vienna (almost 240 million euros), followed by Lower Austria (121.8 million euros) and Upper Austria (121.7 million euros).
“The municipal package 1 has made a significant contribution to the fact that investments could continue, the cities have invested primarily in the renovation and expansion of social facilities, schools and culture, but innovative mobility projects can also be implemented”, explained Ludwig. In the second municipal package of 1.5 billion euros, however, two-thirds are loans that have to be repaid.
213.8 million euros (28.9 percent) of the funds from the first package went to day-care centers and schools, 122.2 million euros (16.5 percent) were used for the renovation of communal roads and 66.0 million euros ( 8.9 percent) used for water supply and sewage disposal facilities. Almost 30 percent of the previous grants were spent on so-called green measures.
“The corona pandemic was and is an unprecedented organizational and financially challenging time for all communities Year shows more than clearly, “said the President of the Association of Municipalities, Alfred Riedl.
