Back in May, you could look across the Coronavirus landscape of Germany, and predict one enormous problem approaching by the end of 2020.....the economic stability of German states and cities.
ARD (public TV, Channel One) picked up the topic today. It's worth a read.
Basically, with the economy shut down for almost two months, there's plenty of tax revenue missing from the pot. That's money that would have gone to support government programs and services.
Short-time work and unemployment benefits? That hurt the country to a great extent.
The buses and trains that attempted to run but were mostly empty in the ban-period? That's revenue that the networks failed to earn.
Last month, the federal government of Germany said that instead of covering 50-percent of all welfare costs that each state expended....it'd go and cover 75-percent.
Course, the federal folks also opened up more financial worries by trimming back the sales VAT for the last half of 2020....which meant that 20-billion Euro is missing from the sales tax reduction. Their hopes were that people would go and buy big-ticket items and move things along faster.
Where this all leads to? Towns and communities want some type of feeling that a more stable economy will occur in the future. My guess is that both the CDU and SPD parties will sit down.....discuss the future, and somewhere in 2021....as part of the election year talk, a more fair distribution of revenue will occur.
Budget cuts coming at the state and community-level? There are probably some programs which will see cuts as you enter 2021.
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