Financial aid plan: Budget support for smaller local governments - Financial assistance plan expands to benefit smaller city governments as well
Thuringia Launches Major Municipal Investment Program
The German state of Thuringia has announced a billion-euro investment program aimed at addressing significant investment backlogs in its municipalities. The program, named the Investment Backlog Investment Program, is expected to provide an economic boost and modernize Thuringia.
The program is designed to benefit all districts, cities, and municipalities in Thuringia. According to the agreement, the districts will receive 356 million euros, the independent cities 228 million euros, and the municipalities 416 million euros. The funds will be available for everyone, with the amount based solely on the population, according to Finance Minister Katja Wolf (BSW).
The loans for the program will be issued by the Thuringian Development Bank, as previously stated. The Thuringian government will continue to cover the interest and repayment of the loans for the program, as previously stated. No credit applications from municipalities will be rejected, and the municipal parliaments will decide alone on the use of the loans.
The Association of Cities and Towns and the Association of Districts expressed satisfaction with the rules agreed upon in weeks of negotiations. The program is expected to set countercyclical impulses during times of crisis, boosting the economy and increasing tax revenues, according to Interior Minister Georg Maier (SPD).
The program is intended as a catalyst for economic impact by accelerating delayed infrastructure projects, increasing construction sector demand. It also aims to enhance local public services and amenities, and strengthen regional economic integration by improving connectivity and asset quality.
The program is particularly focused on small municipalities with limited resources. It seeks to distribute funds with priority to these smaller communities to bring their investment projects up to date, thereby fostering economic growth and regional development.
For example, the recent appointment of Hendrik Hoppe as managing director of Jena-Schöngleina airfield highlighted the challenge of a "significant investment backlog," which is a priority to tackle under the broader investment efforts in the region. While this example focuses on infrastructure at the airfield level, it reflects the program’s wider goal of clearing backlogs to enable modernization and economic expansion.
The refinancing for the program will run from 2023 to 2049, with an amount of 71 million euros from the state treasury. The program is the largest municipal investment program launched in Thuringia since the 1990s, according to Minister President Mario Voigt (CDU).
In conclusion, the Investment Backlog Investment Program in Thuringia is a significant step towards addressing investment backlogs, particularly in smaller municipalities, and towards fostering economic growth and regional development. The program's focus on small municipalities, economic stimulation, and regional development reflects a strategic intent to empower these communities as foundations for Thuringia’s broader economic resilience.
- The Thuringian Government's Investment Backlog Investment Program, with its demonstrated focus on small municipalities, includes provisions for vocational training, as part of the agreed-upon plans to enhance local public services and amenities, thereby promoting regional economic development and integration.
- In order to generate countercyclical impulses and boost the Thuringian economy, the Investment Backlog Investment Program intends to utilize the allocated funds not only for modernizing infrastructure but also for supporting initiatives like vocational training, which are crucial for fostering local business and finance growth.
