Overview

• Markus Söder reiterated on July 30 that Bavaria would exit the Länderfinanzausgleich within five years if negotiations on reforms fail.
• The state government has lodged constitutional complaints and plans additional legal challenges at the Bundesverfassungsgericht.
• Bavaria’s payments in the first half of 2025 surged to €6.672 billion, a year-on-year increase of approximately €2 billion.
• Berlin received €2.028 billion as the top beneficiary, with twelve recipient states sharing funds from four donor regions.
• Baden-Württemberg and Hesse contributed €2.155 billion and €2.039 billion respectively, underscoring deepening strains on wealthy states.