Lawmakers gather for legislative discussions. - The finance minister presents an additional budget to the state legislature.
Germany's Finance Minister Alexander Lorz (CDU) introduces the extra spending plan for 2024 to the Hesse legislature in Wiesbaden on Tuesday. Confronted with revenue gaps and the escalation of the Landesbank, he intends to accumulate new debt at approximately 2.8 billion euros. In the previous year's state budget of 2023, Hesse managed to maintain a balance. Unfortunately, the recent May tax projection left Hesse with a grim outlook: tax revenue is forecasted to fall short by an additional 2.4 billion euros by 2027. We have to brace ourselves for these challenges, Lorz stated while examining the figures.
In the indicative budget for 2024, there are approximately 800 million euros to address the tax deficit, and 2 billion euros for the Landesbank Hessen-Thueringen (Helaba). This development is considered exceptional by the Finance Minister. To address European banking supervisors' concerns about silent deposits, Hesse reveals plans to replace these funds with newly acquired funds. The state possesses a cash deposit of 1.5 billion euros in the Helaba and will purchase a so-called AT1 bond from the bank for 500 million euros.
