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REFILE Rich German states paid record subsidies to poor states in 2017

Europe
22.03.2018
By our dpa-correspondent and Europe Online    auf Facebook posten  Auf Twitter posten  
Berlin (dpa) - Wealthier German states transferred a record amount of subsidy money to poorer German states last year, the Finance Ministry said on Thursday.

A total of 11.2 billion euros (13.9 billion dollars) were transferred as part of Germany‘s Laenderfinanzausgleich (state finanicial compensation) law, 5.3 per cent more than in the previous year.

The law‘s goal is to create equal conditions of prosperity throughout Germany, requiring richer German states mostly in the south and west to transfer money to poorer states mostly in the east and north.

But critics allege it subsidizes bad practices and slows reform in economically weak regions, mostly in the former communist east.

The southern state of Bavaria paid the largest sum last year, transferring 5.89 billion euros to poorer states.

The south-west state of Baden-Wuerttemberg and Hesse - home to Germany‘s financial capital Frankfurt - were also major contributors, paying 2.8 billion and 2.5 billion euros, respectively.

Hamburg became a net contributor for the first time last year, transferring 40 million euros to other states.

The largest benefactor was the German capital Berlin, which received 4.2 billion euros, or 37.8 per cent of the total transfer payments.

 

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