Scholz and the bosses: federal or state: who pays?

The federal states have a strong position in the German federal system.

This is deliberately laid out in the constitution in order to limit state power.

For important projects, the traffic light now needs the approval of the Federal Council if people are to soon feel the relief intended to alleviate the crisis.

Whether housing benefit reform, tax cuts or the successor regulation for the 9-euro ticket - all laws are primarily controversial because they result in high expenditure or tax losses in the state budgets.

This Wednesday, Chancellor Scholz is therefore making a new attempt to reach an agreement with the 16 Prime Ministers on the question: who will pay?

As is always the case before such a meeting, which attracts a great deal of attention, the list of requests from the federal states to the federal government is getting longer by the day.

The negotiating package now includes the rising asylum and refugee costs or the higher energy consumption of the clinics.

The federal states also use their veto position to obtain expensive promises from Scholz in advance about the scope of the “gas price brake”.

The Union is also threatening to block citizen income if the traffic light does not take account of its concerns about the lack of sanctions and asset checks.

It will be difficult to find appropriate and economically responsible compromises in this confusing tangle of interests.

This is most likely to succeed if the federal government resists the temptation to use money to allay financial concerns on the part of the states, instead of discussing with them whether it could be cheaper by granting fewer benefits.

Better compromises can also be expected if different projects are not mixed up.

Temporary energy aid must be separated from permanent decisions.

Neither the standard ticket for local public transport nor the basic income reform should be rushed, their scope is too great.

Voters should show more foresight.

They often only measure compromises based on whether they can get something out of it quickly, instead of considering that the state will ultimately take back money that has been distributed in excess.