Annegret Kramp-Karrenbauer, premier of one of Germany’s smallest states, Saarland, wanted to get something for her state but ended up shooting herself in the foot.
Instead of reaching a settlement on past debts as part of Germany’s new federal state financial equalization scheme – Saarland is among the states with huge financial problems – Ms. Kramp-Karrenbauer ignited a national debate on reorganizing German states. [Under the financial equalization scheme, wealthier states support economically weaker ones. Eds.]
“A failure (to reach a settlement on debt) would ultimately question the current federal arrangement” and whether, for instance, there should be only six or eight states in the future, she said in an interview with German daily Süddeutsche Zeitung.
My advice: Go ahead and make changes. An opportunity will rise in 2019, when policymakers plan to reform the financial relations between the federal government and the states, including the expiring Solidarity Pact II and the financial equalization scheme.
Of the 16 states, only Bavaria, Baden-Württemberg and Hesse have remained “donor states.” All the others are more or less strapped for cash and incapable of meeting their responsibilities in kindergartens and schools, science and research that have remained under their jurisdiction to the extent required in international comparison.