Hesse Finance Minister Alexander Lorz (CDU) has repeatedly vowed that his country will implement austerity measures. The bottom line is that there has been no economic growth in Germany since 2019, he explained recently when presenting the draft state budget for 2026. “This puts the entire public budget under enormous pressure.” To manage the budget, the Minister of Finance, among other things, wants to take advantage of the possibility of easing the debt brake. Today (11:15) the draft 2026 budget will be presented to the state parliament in Wiesbaden.
What are the plans for the 2026 APBN?
According to the Ministry of Finance, next year’s priorities include education, internal security, digitalization, infrastructure and strengthening social cohesion. Among other things, more funding should be provided for action plans against poverty. State administrative spending is expected to fall even though prices rise.
How did Hesse intend to finance his expenses?
According to the draft budget, the country expects a new budget in 2026 Debt of 1.84 billion euros – in line with modified debt reduction. “It is in the country’s interests that we use the leeway provided by the debt brake,” Lorz explained – but also added: “In the long term, only growth and structural reforms, which can and must be implemented by the federal government, will help.”
In 2026, Hesse wants to use income from a pension savings book for the first time, created to cover the increasing costs of pension supplies. 180 million euros will be transferred from pension savings accounts Household flow.
What is burdening the state treasury?
According to Lorz, the economic downturn and the tax cuts decided by the federal government to stimulate the economy mean that the state budget will be short about three billion euros per year for the foreseeable future.
Increased expenses included increased personnel costs (plus 7.6 percent) and higher interest payments (plus 15.9 percent). However, investment will also increase by 6.5 percent, the minister added and firmly welcomed this. On the other hand, aid is expected to be provided at the expense of refugees, as the number of arrivals is expected to continue to decline.
What is the minister complaining about in particular?
“There are a number of people who experience losses every year,” Lorz said. By 2026, Hesse may have to pay 3.5 billion euros for financial equalization in favor of poorer federal states. “Without equalization of financial strength – or even with a moderate variance – Hesse will be able to survive without new debt even in these difficult times.”
What does Hesse’s financial future look like?
Not very bright. The financial situation of the state budget will remain “very tense” until 2029, Lorz predicted. The minister continued to encourage people to save: “Without major economic growth, further structural cuts are inevitable in the coming years.”
© dpa-infocom, dpa:251112-930-280523/1
