Bavaria threatens to cut Berlin funding after die Linke win

Bavaria’s state premier has threatened to cut funding to Berlin if die Linke takes the mayorship and pursues its election promise to expropriate large private housing companies.

Söder threatens Berlin funding cuts

Bavarian state premier Markus Söder (CSU) has called for changes to Germany’s federal state equalisation payment system (Länderfinanzausgleich) so the southwestern state is obliged to send less money to the capital.

“We are now going to put German financial systems under the microscope once again,” Söder said at the CSU parliamentary group’s recent meeting. The Länderfinanzausgleich redistributes financial resources between federal states, with Bavaria and Baden-Württemberg being the biggest donors.

“We’re getting absolutely fed up with the fact that, in the end, we’re expected to foot the bill for other people’s failings and for misguided policies,” the minister added. “It cannot be that extremist, antidemocratic and, first and foremost, antisemitic politics are rewarded.”

Söder’s statement comes a few days after die Linke won Berlin’s state election with 25,7 percent of the vote. The left-wing party campaigned on a promise to enforce the 2021 referendum to expropriate private rental companies owning 3.000 or more units in the city, and is now in coalition talks with the SPD and Greens. Söder made it clear he opposes nationalisation plans. 

According to the new Capital City Agreement signed just a few weeks ago, Berlin is set to receive 5 billion euros in funding - 2,1 billion for security and 2,9 billion for culture - from the Länderfinanzausgleich between 2028 and 2037.

Söder is instrumentalising antisemitism, says Reichinnek

Both Federal Finance Minister Lars Klingbeil (SPD) and die Linke’s parliamentary leader Heidi Reichinnek criticised Söder's statements. Klingbeil said, given current threats, it was “absolutely necessary” to invest heavily in security in the capital.

Berlin’s entitlement to funding is outlined in Article 22 of the constitution (Basic Law or Grundgesetz), which states that “The representation of the [German] state as a whole in the capital is the responsibility of the federal government.” The Capital City Agreement ensures these obligations are fulfilled.

Speaking to the dpa, Reichinnek accused Söder of instrumentalising antisemitism as a response to die Linke’s electoral victory. 

Reichinnek said her party was opposed to the war crimes in Gaza and stands in solidarity with peace campaigners in Israel and Palestine. “The Union is not concerned with Jewish people – who undoubtedly need better protection in Germany too – but with gaining political ground.”

She added that following the AfD’s recent historic victory in Saxony-Anhalt, Söder had rejected plans to reform the Länderfinanzausgleich system. “But when it comes to a left-wing government in Berlin, then he’s shouting about penalties and sanctions.”

Söder said he would open discussions with other state ministers about reforming the Länderfinanzausgleich. But support is unlikely to come from many other federal states, since they also benefit from the current system.

In any case, the state premier believes it is possible to amend the recently signed Capital City Agreement, since it has not been finalised in the overall federal budget.