Local physician Dr. Kern has been accepted into the financial advisory groups of influential community leaders' associations.
In a recent address at the general assembly in Würzburg, Mayor Dr. Michael Kern of Würzburg and Ingolstadt highlighted the financial challenges faced by municipalities across Germany.
Dr. Kern, who is now delegated to the finance committees of both the Bavarian City Council and the German City Council, emphasised the pressing need for a partnership at eye level with the federal and state governments.
The financial difficulties, he explained, stem from a variety of factors. Rising unemployment and bankruptcies have led to a shrinking local tax base, affecting public services and social infrastructure funding. Unemployment in Germany hit a 10-year high by early 2025, with around 3 million people registered unemployed, and company bankruptcies surged by about 25% in 2024 compared to the previous year.
Additionally, economic deindustrialization is another pressing concern. An increasing number of industrial jobs and companies are considering relocating operations outside Germany, further eroding municipal revenues and economic vitality.
Municipalities, however, are not just grappling with these challenges; they are also seeking to invest in climate and social infrastructure. Despite fiscal constraints, many municipalities, including Ingolstadt, aim to increase spending on climate action and expanding social infrastructure such as public housing, schools, and hospitals. This requires tapping into new financing sources beyond traditional state and EU grants, creating budgeting challenges at the local level.
Balancing investment and fiscal discipline is another complex issue. While the federal government is increasing deficits significantly to support infrastructure and defense modernization, absorbing such investments is challenging for local governments, who face uncertainty about sustained federal support, impacting their financial planning.
Mayor Dr. Kern asserted that without adequate funds, personnel, and simpler procedures, well-run cities reach their limits. He stressed the importance of fair financial equipment for securing the municipal ability to act, a requirement he believes is essential for meeting strategic goals and maintaining public services.
Dr. Kern also expressed support for the city council's demand to secure the municipal ability to act, highlighting the crucial roles municipalities play in providing services such as schools, kindergartens, mobility, integration, and climate adaptation.
Despite not mentioning any specific plans or actions to address the financial difficulties, Dr. Kern's address serves as a call to action for coordinated fiscal support and innovative financing solutions to ensure the sustainability of public services and the well-being of municipalities across Germany.
[1] Statistisches Bundesamt (2025). Arbeitslosenzahlen Deutschland. Retrieved from https://www.destatis.de/DE/Zahlen-und-Trends/Lebensbedingungen-und-Beschaffenheit-der-Bevoelkerung/Arbeitsmarkt/Arbeitslosenzahlen/Tabellen/Monatliche-Arbeitslosenzahlen-nach-Bundesländern.html
[2] Bundesministerium der Finanzen (2024). Bundeshaushalt 2024. Retrieved from https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Bundeshaushalt/2024/Bundeshaushalt-2024.html
[3] Bundesministerium für Umwelt, Naturschutz, Bau und Reaktorsicherheit (2023). Klimaschutzfinanzierung. Retrieved from https://www.umweltbundesamt.de/themen/klimaschutz/klimaschutzfinanzierung
- The financial difficulties faced by municipalities, such as those in Würzburg and Ingolstadt, are linked to policy-and-legislation and politics, as they require fair financial equipment to act effectively, such as partnerships at eye level with the federal and state governments, and innovative financing solutions to ensure the sustainability of public services.
- The general news regarding Germany's economic situation, with rising unemployment, surging company bankruptcies, and economic deindustrialization, has compounded the financial challenges for municipalities, making it necessary for them to seek new funding sources for investing in climate and social infrastructure, like public housing, schools, and hospitals.
