Federal Council: Countries require compensation for investment programs

The federal states support the planned tax relief for the weak economy, but require compensation for their loss of income. “We want these relief measures for the economy because we now need it for future growth. But we also have to be able to do it,” emphasized the Prime Minister of North Rhine-Westphalia, Hendrik Wüst (CDU), in the Federal Council. In the third year without economic growth, countries and municipalities also worked with savings households.

Several state chiefs made it clear that they could not agree with the package in the Federal Council without financial compensation. Better tax depreciation options for companies that buy machines, devices and electric cars are planned. Corporation tax should also decrease from 2028.

Consultations with Merz next week

According to calculations from the district, the federal government, the federal states and municipalities take up almost 50 billion euros less taxes. The federal government wants to pay a third, two thirds should shoulder countries and municipalities, criticized the Prime Minister of Mecklenburg-Western Pomerania, Manuela Schwesig (SPD). “This is not a fair distribution.”

In the coming week, prime ministers want to meet Chancellor Friedrich Merz (CDU) to find a solution. So that the relief could be decided before the summer break in July, a lengthy mediation procedure should be avoided as far as possible, said Schwesig. However, a good offer from the federal government is necessary.

State Secretary Rolf Bösinger emphasized that there was a close and constructive exchange. With the investment program, the federal government, the federal states and municipalities went into advance payments at short notice, but later they also benefited from more economic growth.