Bavaria to challenge German states' Robin Hood scheme

AFP, Tuesday 17 Jul 2012

German state says it will file a complaint in Germany's highest court against a programme where wealthier states would transfer funds to poorer ones

German state Bavaria said Tuesday it would file a complaint with the country's top court against a programme where it and other wealthy regions transfer funds to poorer ones.

State premier Horst Seehofer, leader of the Christian Social Union (CSU), the Bavarian sister party to Chancellor Angela Merkel's Christian Democrats, said he aimed to fight a "serious imbalance in the system".

After months of threats to challenge the Robin Hood scheme and years of failed negotiations, Seehofer noted in a statement that only four of the regional "Laender" paid into the pot while the other 12 were recipients.

"We are happy to show solidarity but we're not stupid," Bavarian finance minister Markus Soeder said after the state's cabinet agreed to file the complaint to the Federal Constitutional Court by the end of the year.

State officials expect a decision by 2014 at the earliest.

The current system runs until 2019, after which German states will be subject to a "debt brake".

In 2011, rich states gave some 7.3 billion euros ($9.0 billion) to poor states, including 3.7 billion euros from Bavaria alone.

Berlin, a city-state, was the biggest recipient with more than three billion euros pouring into the heavily indebted German capital.

German regions have major discrepancies of wealth, particularly between the former communist eastern states and the more prosperous west, although there are notable exceptions.

The refinancing system is aimed to even out differences in Germans' standard of living to underpin political stability.

Seehofer's CSU lost its absolute majority in the Bavarian state parliament for the first time in nearly half a century in 2008 and faces a tough battle at the polls next year, when Merkel is also up for re-election.

He has also been critical of bailouts for struggling eurozone states.

The premier of the struggling northeastern state of Mecklenburg-Western Pomerania, Erwin Sellering, said Seehofer was playing politics with poor regions' financial lifeline.

"Solidarity in Germany is more important than a state election in Bavaria," he said, according to local news agency DPA.

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