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In 2024, municipal core budgets recorded a record deficit of €24.3 billion, with €14.1 billion attributable to municipalities in rural areas. The main reason is the continued rise in social spending, while revenues remain stagnant.
However, the per capita deficit in rural areas is around 45 percent lower than in urban areas. This is mainly attributable to lower case numbers and reduced costs in the social sector, along with decreased personnel expenses. Additional regional differences arise in the ability of urban and rural regions to finance investments. The article outlines the fiscal and administrative reforms needed to secure long-term investment capacities of the municipalities.
To the current edition 03/2025
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Contact: Dr. Dominik Frankenberg
