Translated material
Burden of the capital
Berlin does not want to be bankrupt, but wants to get into the constitution
These days, the German Federal Constitutional Court is holding a trial in Berlin's lawsuit, with the help of which the city is trying to claim additional financial resources from the federal government. The German capital has the status of an independent federal state and is a full-fledged subject of the federation. Berlin is among the states that receive financial assistance from the federal center and wealthy donor states such as Bavaria or Baden-Württemberg.Every year, 3.5 billion euros are allocated to Berlin from the central and donor state budgets to perform the functions of the capital. The city government is demanding a significant increase in this amount. The Berlin Senate is counting on additional financial injections of 35 billion euros. The central authorities, for their part, flatly refuse to do this, pointing out that Berlin itself must extricate itself from its financial problems. For a decade since the city's unification, its government has been led by Christian Democrats, whom the new authorities largely blame for the current plight of Berlin's finances. Since 2001, the “red-red coalition” of the Social Democrats (SPD) and the East Berlin Party of Democratic Socialism (PDS), which is considered the heir to Honecker’s SED, has come to power in the Berlin government.
The problems of the German capital are quite serious. The ruling burgomaster of Berlin, Social Democrat Klaus Wowereit, spoke the other day and said that the city is increasingly becoming “an all-German home of the poor.” To date, the amount of city debt has reached 60 billion euros, and Berlin cannot overcome this mountain of debt on its own. “The Republic cannot abandon Berlin to its fate,” Mr. Wowereit said at the opening of the trial in the constitutional court. However, until now, such emotions of Berlin mayors have not helped matters. The bankrupt city spends 2.4 billion euros annually on servicing its debt alone. At the same time, tax revenues do not cover even half of the city budget, which amounts to 21 billion euros. The budget debt in terms of one resident of the capital exceeds 17 thousand euros.
It is curious that Berlin's budget debt has increased sixfold since its reunification. In the “old Federal Republic,” West Berlin was the façade of a prosperous Western world, and Bonn did not overly restrict the financial appetites of its politicians. Just like the capital of the GDR, East Berlin, the republic of workers and peasants received special allowances. Most of the privileges familiar to both parts of the city disappeared with the fall of the wall.
In the summer of 1994, the political and economic chaos of the transition period, when it was necessary to merge the eastern and western parts of Berlin, was somewhat contained by the agreement on the financing of the capital, which was concluded by the federal government and the city senate. According to this document, the German government provided the capital with 1.3 billion German marks. This money was allocated for a number of transport projects, culture, as well as “special capital expenses.” In subsequent years, Berlin managed to extract some more money from the center for the development of culture (10.2 million euros per year), as well as for strengthening security - after the events of the autumn of 2001.
Nevertheless, the city authorities, out of old habit, continued to live large, investing money in “prestigious projects”, which in fact only resulted in additional losses. Thus, in the hope of an influx of investor firms, 100 thousand new apartments were built in the capital in the mid-90s, most of which are still empty. On the contrary, some large enterprises, such as the electronics company Siemens, which moved to Munich, left Berlin precisely after reunification, when tax breaks that had existed in West Berlin for decades were abolished. At the same time, the city administrative apparatus for many years after the merger of both parts of Berlin continued to maintain overlapping structures that employed many thousands of officials. In many ways, the finances of the “city-state” were undermined by a major financial and corruption scandal that erupted in the late 90s in the depths of the Berliner Bankgesellschaft, which was half owned by land.
The ruling burgomaster Wowereit, who initiated Berlin's lawsuit against Germany, said at the opening of the trial that the capital has now tightened its savings belt "until it's hoarse." Recently, a third of the entire apparatus of city officials has been cut, of which there are now 144 thousand. The remaining city officials have had their salaries and all kinds of allowances cut. The mayor was well aware that he could count on the success of his legal battle against the central government only if the constitutional court was convinced of the consistency and effectiveness of the planned savings measures. However, according to experts, this alone may not be enough for the highest court in Germany. To make a decision in favor of Berlin, the court will need to be convinced that this city, due to its financial bankruptcy, is no longer able to perform the functions of the capital in accordance with the constitution.
Today in Germany no one can answer the question of what they are. The Basic Law does not stipulate at all that Berlin is the federal capital. Only in the Unification Treaty of August 31, 1990 was it stated that the capital of Germany was Berlin, and a year later the Bundestag decided that this city also became the seat of the federal parliament, the government and its institutions. The current ruling burgomaster Klaus Wowereit demanded that the status of the capital be specified. To do this, he proposed to supplement the relevant provisions of Art. 22 German Basic Law. Today it looks quite modest: “The federal flag is black-red-yellow.” According to Mr. Wowereit, the main document of the republic should contain indications that Berlin is the seat of the president, parliament and government. The ruling burgomaster considers it necessary to fix the following requirement in the constitution: “The federal center will compensate Berlin for the necessary expenses for the special financial burdens caused by the status of the capital.”