States at odds over distribution of vw billion

The federal states are at odds over the distribution of the billions in money the volkswagen group paid to lower saxony over the diesel scandal.

While the finance ministers of the states of hesse, schleswig-holstein and brandenburg are in favor of a nationwide distribution, lower saxony’s finance minister reinhold hilbers (CDU) rejects exactly that – and receives support from bavaria and hamburg.

"We should stick to the current legal situation and not act according to desires," hilbers explained in hanover. The equalization of financial resources only affects taxes and individual levies – but not money-grubbers. Stuttgart also refers to the current legal situation.

Bavaria’s finance minister albert furacker (CSU) supported the plan: "of course, everyone would like to have additional funds at their disposal. But the question of who is entitled to the money is clearly regulated by the basic law and the fiscal equalization act, i.E. A legal question and not a question of decency."Hamburg’s finance senator andreas dressel (SPD) also spoke out against changing the payment flows in the state depending on the individual case.

The carmaker’s practices had caused damage nationwide, on the other hand, hesse’s finance minister thomas schafer (CDU) explained. To ensure that lower saxony is not the only state to benefit from the VW billion, a compensation scheme should be developed, suggested the current vice chairman of the conference of state ministers.

Previously, kiel finance minister monika heinold (grune) had called for a nationwide distribution of the money jack, which had been imposed by the braunschweig public prosecutor’s office.

The billion-dollar jack could even lead to revenue shortfalls for the federal government and the federal states, if VW deducts the payment from taxes. According to a model calculation by the lower saxony ministry of finance, the federal and state governments would have to bear a share of the estimated 150 million euros in lost corporate tax revenue, as a department head told the state parliament’s budget committee. In addition, there was a shortfall of around 140 million euros in trade tax and a smaller amount in the solidarity surcharge. A VW spokesman was open about the company’s specific plans, but said: "typically, such payments are not tax-deductible."

Schafer said: "states and municipalities all over the republic have to think even more about clean air because of the emissions scandals: cases like VW’s are of national importance."He referred to earlier cases in which he had already made similar demands. "Even money-grabbing cases brought against banks have so far remained with individual lander – even if the banks have assisted customers throughout germany in evading taxes," schafer said. Good cooperation between authorities across national borders should not end with money.

Baden-wurttemberg’s ministry of finance declares that the distribution of bubble money does not play a role in the fiscal equalization system. "They benefit the country in which they are imposed. If we wanted to change that, we had to amend the financial constitution accordingly," said a spokeswoman for minister edith sitzmann (grune). But the agreement on a reform of the federation-lander financial relations is not long in coming, he says. "There were no efforts to make changes in this respect, and they are not to be expected – given the admittedly difficult and time-consuming negotiations."

Brandenburg’s finance minister christian gorke (the left) told the "tagesspiegel" that "it would be fair if the penalty payments went to all state budgets". The diesel scandal not only affects the state of lower saxony, but the entire population. "With the approximately 30 million euros that brandenburg was arithmetically entitled to, a traceable environmental impulse could be set here."Therefore, it would be right to think about a change in the legal basis now, in order to be able to compensate all affected countries through the penalty payments.