Thuringia: High loans after Corona – Court of Auditors warns of risks!

Thuringia: High loans after Corona – Court of Auditors warns of risks!

Thuringia is in a time of financial upheaval. For the first time after the corona pandemic, the Free State is taking out large loans to finance its budget. The state budget has a volume of almost 14 billion euros. At the same time, the President of the Court of Auditors, Kirsten Butzke, warns of the risks associated with these rising debts. In a clear appeal, she calls for an early warning system to monitor the budget situation. Butzke describes the planned investment program for the municipalities, which includes 1 billion euros by 2029 and is financed by loans from the development bank, as hidden national debt.

Thuringia's demographic development is particularly worrying: the population and therefore the number of employed people are shrinking. This inevitably leads to lower income. Despite the financial challenges, Thuringia has not taken out any new loans in recent years, except during the Corona pandemic, and has paid off some of the existing debts. However, the country's debt repayments have already been suspended since 2025, which could further aggravate the financial situation.

Forecasts and financial planning

Next year, Thuringia is planning loans of around 600 million euros, followed by around 500 million euros in 2027. In total, around 1.1 billion euros in loans are planned for the 2026/27 double budget. Butzke emphasizes that debt is not free and that interest and principal payments severely limit the country's financial flexibility. According to forecasts, Thuringia will have to pay around 250 million euros in interest this year.

In addition, a stability report should provide well-founded forecasts about the Free State's spending and debts. The report could be scientifically supported, similar to the model in Schleswig-Holstein, which Butzke points out. The federal government is already preparing a sustainability report that could potentially serve as a model. The need for sound financial management is becoming increasingly clear, especially in times when financial flexibility is decreasing.

Solidarity Pact II and Thuringia's financial support

An important aspect of Thuringia's financial policy remains the Solidarity Pact II, which has existed since 2005 to 2019. This pact guarantees the new federal states, which include Thuringia, financial allocations from the federal government. In total, the new states will receive 156.7 billion euros, with Thuringia receiving 14.31% of the annually distributed amounts from Basket I, which corresponds to around 15.07 billion euros.

For 2019, Thuringia had funds of around 300 million euros available. However, the allocations from Solidarity Pact II are degressive and directly influence the Free State's future financial resources. This illustrates the challenges facing Thuringia's financial policy - both in the present and in the future.