The fact this is coming from Germany's government-funded Deutsche-Welle is rather attention grabbing. January 7:
Many cities and municipalities in Germany are near bankruptcy, and no longer know how they're supposed to fulfill their responsibilities. They are blaming the federal government.
It wasn't so long ago that Weissach, a half-hour drive from Stuttgart, was the richest local authority in Germany. The small town in southern Germany is home to 7,700 people and the development center for luxury carmaker Porsche. The municipality benefited from the company's billion-dollar profits via trade taxes, which flowed into its budget.
In 2009, Weissach collected €20,000 ($23,000) in taxes per inhabitant.
"Thanks to Porsche, in Weissach we have the highest per capita tax revenue in all of Germany," remarked then-mayor Ursula Kreutel gladly in 2011 at the opening of an extension of the Porsche facility.
Families wanting to build a house in Weissach received a €10,000 construction bonus per child from the council. The city built a four-level library and bought a concert piano costing €100,000; there were subsidies for private music lessons. Most of the money, however, was put in the bank to provide a buffer for hard times, Kreutel promised.
Plentiful years are over
The hard times have arrived. Germany's automotive industry is in the deepest crisis of its history. At Porsche alone, profits tumbled about 96% in 2025.Other industries are also struggling. The tax revenue the municipalities greatly relied on has dropped rapidly. Even once prosperous cities and towns can no longer cover their expenses.
"The finances of the local authorities are in a dramatic free fall," said Ralph Spiegler, president of the German Association of Towns and Municipalities
(DStGB) and himself mayor of Nieder-Olm in the western German state of Rhineland-Palatinate.
Social costs blowing the budget
In Germany, powers and responsibilities are divided among the federal, state and local governments. Local authorities are responsible for many aspects of daily life and, therefore a considerable portion of government duties. That ranges from trash collection to water supply, schools and kindergartens, firefighting, sport and culture and most social benefits....
....MUCH MORE
