Overview

• SPD leader Lars Klingbeil said he is optimistic about reaching a joint solution by Tuesday to compensate Länder and Kommunen for budget shortfalls.
• The Bundestag is scheduled to vote next Thursday on an economic stimulus package designed to revive Germany’s sluggish growth.
• Proposed measures include expanded tax depreciation allowances for machinery and electric vehicles to encourage corporate investment.
• The package’s incentives are expected to reduce federal, state and municipal revenues, prompting demands for a federal financial equalization.
• A planned cut in the corporate tax rate from 2028 will further strain subnational budgets in light of many municipalities’ heavy indebtedness.