Financial holes - Schwesig to make government statement

Financial holes - Financial holes - Schwesig to make government statement

Millions of revenue losses for the country due to the corrected population size and the weak May tax revenue alarm the regional politics. The FDP demanded a government statement from Minister President Manuela Schwesig (SPD) in the state parliament regarding how to proceed with the state budget.

The parliament meets next week. "The revenue losses from tax evasion and financial equalization due to census data will make it impossible for the budget to be implemented as planned in 2025," said the chairman of the Liberal fraction in the state parliament, René Domke.

Two financial holes in the three-digit million range

"The challenges for medium-term financial planning are even more demanding, as it already included a requirement for annual action from 2026 to 2028 of around 400 million Euros." The May tax revenue is now expected to be 200 million Euros less per year than planned. Nearly 200 million Euros less per year will come from the federal financial equalization due to the census.

The federal financial equalization is calculated based on the population size. As Mecklenburg-Vorpommern is a net contributor, it receives less money with fewer inhabitants. The census, formerly known as the population census, had 1,571,239 inhabitants in Mecklenburg-Vorpommern on May 15, 2022, which is 56,000 fewer than previously assumed based on data from the registration offices. Experts attribute the difference mainly to foreigners who did not deregister when leaving Germany.

Revenue from the May tax was already a buffer for the state finances. Therefore, Mecklenburg-Vorpommern must plan for 96 million Euros less in tax revenue for this year and 150 million Euros less in 2025 than initially anticipated.

The Finance Ministry informed the Finance Committee of the state parliament about the new financial gaps due to the corrected population size yesterday. The exact implications for the state budget are not yet clear to the state government. "The fiscal political consequences are currently being checked," said a spokeswoman for the Finance Ministry.

1. The population size correction and the weak May tax revenue have raised concerns about the state budget in Mecklenburg-Western Pomerania, Germany.
2. In response to these financial challenges, Rene Domke, the FDP chairman in the state parliament, called for a government statement from Manuela Schwesig.
3. The census data has revealed two financial holes in Mecklenburg-Vorpommern, totaling over 300 million Euros, due to tax evasion and population size-based financial equalization losses.
4. The state government now anticipates a revenue loss of 96 million Euros this year and 150 million Euros in 2025 due to the smaller population size and reduced May tax revenues.
5. Mecklenburg-Western Pomerania, as a net contributor, will receive lesser funds from the federal financial equalization due to its decreased population size, as per the calculation based on population size.
6. The SPD-led government is currently evaluating the fiscal political implications of these financial gaps, as reported by a spokeswoman from the Finance Ministry.

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