Overview
- The Länderfinanzausgleich reached a record €11.178 billion in the first half of 2025, a 14 percent increase over the previous year.
- Bavaria contributed €6.672 billion—the largest share by far, accounting for almost 60 percent of all transfers.
- Hesse paid more than €2 billion (€325 per capita) and criticized the arrangement as unsustainable amid domestic budget constraints.
- Minister President Markus Söder warned that Bavaria will withdraw from the financial equalization system within five years if reforms fail.
- A coalition agreement includes a €400 million annual federal supplement for donor states, but the required legislation remains pending.