Tough Austerity Course for Berlin: What Evers Is Now Announcing

TVS News AI, editorially supervised, presents Tough Austerity Course for Berlin: What Evers Is Now Announcing.

Around 4.1 billion euros—roughly a tenth of Berlin's current overall budget: that is how Finance Senator Stefan Evers (CDU) estimates the financing gap in the 2028 budget. It is the central figure the CDU politician cited when presenting the capital's financial planning through 2030—a plan the black-red Senate had previously adopted.

"We will have to keep working to achieve more with less money."

What sounds like a standard formula becomes very concrete in Evers' planning. In the years after 2028, further gaps of roughly 5 billion euros each loom according to his calculations. An improvement in the underlying conditions is not to be expected, Evers said. "Future budgetary and fiscal policy will have to be shaped by strict fiscal consolidation," the senator stressed—at the same time, investments are needed so as not to hamper the development of Berlin's economy.

Interest Rates Drive Up Costs – 2 Billion Euros by 2029

One reason for the tightness lies in debt servicing. Berlin currently transfers 1.35 billion euros per year to the banks to service its debt load of nearly 73 billion euros. According to the financial planning, interest payments climb to 2 billion euros by 2029. The credit financing ratio, currently at 6.3 percent, is to fall to just 2 percent by 2030. For Evers, that means: spending must decline in 2027 and 2028—even though prices and wages to be paid are rising simultaneously.

Civil Servant Pay: At Least 1.2 Billion Euros in Back Payments

A second chunk comes from Karlsruhe. Following the Federal Constitutional Court's ruling on civil servant pay, a retroactive back payment of at least 1.2 billion euros is owed for the period up to the year 2020 alone, according to Evers—and higher amounts would be due after a restructuring. Exactly what Berlin faces remains unclear, Evers said.

If the Cuts Don't Materialize

Evers spells out the consequences clearly: if spending cannot be reduced, Berlin will—according to his words—be forced by requirements from the Financial Stabilization Council of the federal and state governments to comply with EU debt rules. States like Bavaria or Hesse could then have a say in what the capital can still afford and is allowed to do.

The financial planning lands in the middle of exploratory talks between The Left, the Greens, and the SPD over a possible new coalition. The numbers presented thus offer a foretaste of the fiscal tasks any new government will have to tackle—and under what consolidation pressure priorities on investments and cuts will have to be negotiated.