The state authorities decides on key features of resolving outdated money owed

In an effort to present higher aid to municipalities in troublesome monetary occasions, the state authorities has introduced key factors for decreasing the inventory of municipal liquidity loans from 2025.

The state authorities pronounces:

Regardless of the tight funds state of affairs, the state is taking an enormous step in the direction of getting many cities in North Rhine-Westphalia long-term aid from their outdated money owed. In doing so, the state authorities is fulfilling a key promise of the coalition settlement.

In an effort to preserve the purposeful capability of the municipalities, the details determined now state that the state will present 250 million euros per yr from 2025 to completely remove outdated municipal money owed. Over the following 30 years, 7.5 billion euros in further monetary assets from the state will move into the municipalities. Along with the federal authorities’s promise to take greater than half of the loans, half a billion euros per yr could be accessible to the municipalities. In complete, this might give municipalities a aid of 15 billion euros over the following 30 years. Discussions with the federal authorities on this concern are pending.

Prime Minister Hendrik Wüst: “Excessive inflation, sharply elevated rates of interest, a typically weak economic system and, consequently, declining tax revenues – these factors put stress on public budgets in any respect ranges. Many cities in our nation even have to hold a heavy mortgage within the type of outdated money owed. As a state authorities, we now have at all times careworn that it will be important for us to supply extra help to municipalities and due to this fact be certain that they can act. That’s the reason, regardless of the commonly tight funds state of affairs in North Rhine-Westphalia, we’re dedicated to fixing the outdated debt downside. With the details determined now, we’re making ready this fashion and guaranteeing 7.5 billion euros to municipal areas over the following thirty years. In troublesome occasions we make a dedication that binds us for many years. This dedication to the municipalities is the precise technique to lastly attain a considerable resolution along with the federal authorities. Now it’s the federal authorities’s flip. We count on that he may even maintain his phrase and clear the best way for the promised federal involvement. This is able to get a complete of 15 billion euros in 30 years. It might be a historic aid for our communities.”

Deputy Prime Minister Mona Neubaur: “Our municipalities are the engine room of democracy. Right here, residents expertise politics in concrete phrases, and right here politics impacts their day by day lives. Practical public infrastructure shouldn’t solely be offered, but it surely additionally reinforces the democratic foundation of our society. However when the faculties develop into moldy, when swimming swimming pools and libraries have to shut, when cultural grants need to be reduce, this basis erodes. Because of the extreme debt burden, it was not potential in lots of cities and communities in North Rhine-Westphalia to spend money on the sustainability of this basis within the final a long time. With the important thing factors determined within the cupboard at this time, the state authorities is taking the primary essential step to take concrete steps. Now it’s the accountability of the federal authorities to take its share of accountability. We count on the federal authorities to lastly ship.”

Ina Scharrenbach, Minister of the Inside, City Affairs, Building and Digital: “Regardless of the tight state funds state of affairs, North Rhine-Westphalia will make 250 million euros accessible yearly from 2025 to completely remove outdated municipal money owed. This makes this state authorities the primary to cope with fixing municipal liquidity loans. So the federal authorities is anticipated to comply with swimsuit.”

background

On December 31, 2023, the beginning worth of municipal liquidity loans in North Rhine-Westphalia was roughly 20.91 billion euros. The Federal Ministry of Finance has given key parameters to the affected states for taking on outdated municipal money owed. Accordingly, the federal authorities could be prepared to contribute 50 p.c of the surplus liquidity loans that the state would take over.