Bavaria wants out

According to the dpa, the governing coalition and opposition have recently found themselves locked in a fierce debate over the Bavarian stance against fiscal equalisation. The inter state fiscal adjustment process, which is a political mechanism concerning the redistribution of financial funds between the federal republic and the federal states, has been causing some controversy.

In 2011 the so called "giver- states" were Hessen, Baden-Wuerttemberg, Hamburg and Bavaria, leaving the remaining 12 to be "taker-states". Bavaria was by far the main contributor out of these "giver-states", with more than EUR3,7 billion of the tax-payer's money being given out to the so-called "taker-states". For the state of Bavaria, this means that it pays more money in one year into the fiscal adjustment programme than it has received from it over the past 40 years. Horst Seehofer (CSU), Bavaria's Minister-President, has therefore demanded a radical change to the financial compensation process. He claims that a limit on the amount allowed to give by the giver-states would in his opinion make the extent of solidarity in Germany more jus,t whilst at the same time protecting Bavaria's economy and its taxpayers. For example, in Bavaria students have to pay a tuition fee of EUR500 Euros per semester, compared to Berlin , the main "taker-county", where the students there are not charged with tuition fees at all. The Bavarian Minister of Finance, Markus Söder (CSU), supports Seehofer's claims and states that " Bavaria is solitary but not stupid." The Coalition are therefore demanding reform in the constitutional court in Kalsruhe. This move of the coalition has been majorly criticised by the opposition. The Green Party and the SPD condemn Seehofer's decision as an attack on federal solidarity. A decision by the Constitutional Court is not expected until 2014, so this issue will remain a somewhat sticky wicket within German politics for some time yet. 


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