Over-indebted City of Füssen Receives Stabilization Aid as Mayor Continues Consolidation Efforts

He has been trying to do this for almost two years, and now Mayor Maximilian Eichstetter can announce “very good news”: the city feet has been included in the Bavarian stabilization aid program and has retrospectively received two million euros for the repayment of contaminated sites for 2022.

But that should only be the beginning: For this year, the city has even applied for 10.6 million euros in aid – at the beginning of October it will be decided how much money will actually flow. “Social assistance” for over-indebted municipalities will only flow in the future if Füssen continues to follow a strict consolidation course and continues to update its budget consolidation concept. According to Eichstetter, it will probably take another eight to ten years before the city is financially viable again.

Stabilization aid for Füssen: Mayor Eichstetter created a consolidation concept

Eichstetter himself had begun working out the budget consolidation concept. In painstaking detail work, he remembers, he put together 75 pages. Main office manager Peter Hartl and treasurer Thomas Klöpf and their teams finally supported him. After two years of intensive work, the concept now has more than 200 pages: “It borders on a doctoral thesis – but it was worth it,” says the head of the town hall. In addition, a “tracking tool” was developed by the Treasury: All 126 individual resolutions of the city council in terms of austerity measures are listed here and are driven forward according to the degree of target achievement.

But anyone who now believes that the city of Füssen would be able to act economically again thanks to social assistance must be confronted with reality by Eichstetter: This is by no means the case. “A school renovation with 60 million euros and three kindergartens with 25 million euros leave us no room to breathe. The stringent course has to be made a lot tighter and tighter in some places!” he says. The aim is for the city of Füssen to be economically viable again in eight to ten years.

Two million euros for Füssen: City repays loans from 1999 and 2013

And the stabilization aid is a decisive factor for this: With the two million euros for 2022, the city is repaying loans from 1999 and 2013. Without the state aid, the city would have had to take out a loan of two million euros with four percent interest. So you only save the loan, but also an annual interest charge of 80,000 euros.

For this year, Füssen has applied to the Free State for 10.6 million euros for stabilization aid to replace old loans. A handsome sum when you consider that the money pot of this program for all of Bavaria is filled with only 120 million euros. The distribution committee will decide at the beginning of October how much money the over-indebted municipalities will receive. This body is made up of representatives of the finance and interior ministries as well as the municipal umbrella organizations.

Mayor Eichstetter is hoping for stabilization aid by 2027

Eichstetter points out that municipalities such as the city of Hof recently collected 5.5 million euros. He will ask all political officials to “support us so that we too can benefit from such an amount”.

The mayor hopes that Füssen will still receive stabilization aid for the reduction of contaminated sites by 2027. From 2025, the city could also apply for investment aid. This money can be used for investments in basic municipal equipment – in particular the school/kindergarten area, roads, fire brigade and town hall/administrative buildings. It can also be used to finance upcoming municipal structural measures.

High debts: Füssen still has a lot of loans to service

The city of Füssen alone currently has a debt of just over 44 million euros (as of August 7th). The debts of the public utilities and other areas are not yet taken into account.

The municipal debt results from 79 loans, the longest, according to Mayor Maximilian Eichstetter, runs until December 30, 2075. Depending on when the city of Füssen took out one of these loans, the interest rate ranges from zero to 5.52 percent. The city has to shell out one million euros per year for interest alone.

According to the budget, the debt of the city of Füssen would increase to 50.5 million euros by the end of the year.