Rhineland-Palatinate becomes a donor state in financial equalization

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People walk through a shopping arcade in downtown Mainz. (Archive image) © Andreas Arnold/dpa

It used to be called state financial equalization, today financial power equalization. But the biggest donors remain the same. After the Bavarians, there are the Baden-Württembergers. A country that was previously a recipient is now paying in.

Stuttgart/Berlin – The three southern federal states of Bavaria, Baden-Württemberg and Hesse continue to shoulder the once again significantly increased balance of financial power between the states.

Bavaria remains by far the largest contributor, followed by the southwest and Hesse. Berlin and Saxony continue to be the biggest beneficiaries, according to a list by the federal government that is available to the German Press Agency. Rhineland-Palatinate is new to the group of donor countries.

The system of redistribution from financially strong to poor countries, formerly known as state financial equalization, comprised a good 17.1 billion euros for 2021.

Bayern pays more than half

Bavaria had to pay almost 1.3 billion euros more than in 2020 and now comes to a good nine billion euros. That’s more than half of the total compensation. Baden-Württemberg is in second place with four billion euros. That is another 340 million euros more than in 2020.

Hesse in third place had to raise an additional billion euros and is now at a good 3.5 billion euros. The new donor state of Rhineland-Palatinate had to pay 287 million euros. Hamburg remains in the group of payers and contributed 230 million to the compensation.

Berlin remains in first place among the eleven recipient countries with 3.6 billion euros. Second is Saxony, which with around 3.2 billion euros received more than half a billion euros more than in 2020. Saxony-Anhalt, Lower Saxony and Thuringia follow with just under two billion euros each. The most populous state of North Rhine-Westphalia dropped out of the ranks of donors and instead received 200 million euros last year.

Bavaria paid around 687 euros per inhabitant on a per capita basis. Baden-Württemberg is in this ranking with 361 euros behind Hesse with 566 euros. The biggest beneficiary in this calculation is Bremen, with 1233 euros per capita. Berlin follows with 983 euros per inhabitant and Saxony-Anhalt with 911 euros. dpa


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