2,800 euros per resident – Bremen benefits most from financial equalization

Bremen receives more per capita from financial equalization than any other federal state. This emerges from a study by the German Economic Institute (IW), which was first reported by the “Rheinische Post”. When money is redistributed between financially strong and financially weak federal states, Bremen receives almost 2,800 euros per resident.

Following behind in the ranking are Berlin with 1,800 euros per person, as well as Thuringia and Saxony-Anhalt, each with around 1,600 euros per capita. Specifically, the federal states receive higher sales tax revenue than they would be entitled to based on the population alone. Financially strong federal states receive a correspondingly smaller share of sales tax.

According to its own information, the employer-affiliated IW has examined how the financial power equalization and other federal subsidies - for example for social spending, local transport or debt service - affect the states' income when compared with a scenario without redistribution.

According to the institute, for many countries these funds make up a significant part of the budget. Almost 30 percent of Bremen's income comes from the donor states and the federal government. On the other hand, Bavaria is the largest donor country with around 880 euros per capita. Despite receiving federal subsidies, the Free State is the only federal state to make a net loss when it comes to equalization of financial strength.

Bavaria's Prime Minister Söder recently brought up the possibility of reopening the recently renewed capital city contract if the Left were to take over government in Berlin. The CSU chairman justified this, among other things, with the Left Party's expropriation plans.