MOSCOW, December 1. /TASS/. Germany's refusal to purchase Russian energy has led to a financial crisis for municipalities in the country, Fyodor Basov, Associate Professor at the faculty of World Economy and International Affairs at the National Research University Higher School of Economics, wrote in his column for TASS.
"The current crisis in local and municipal finances is a consequence of the ongoing recession in the German economy and inflation since 2023, primarily caused by Germany's refusal to purchase Russian energy," he wrote.
The expert recalled that financial difficulties for German municipalities have arisen repeatedly throughout history. These were caused by the aftermath of such significant events as German reunification in 1990, the global financial crisis of 2008-2009, and the COVID-19 pandemic. However, as the analyst stressed, this particular municipal finance crisis is considered the most severe since the founding of the Federal Republic of Germany in 1949.
"Despite the fact that German municipal revenues have been growing steadily in recent years, expenditures are outpacing this growth. This means that the main cause of the debt crisis in German cities and local communities is high inflation, which makes infrastructure maintenance and development costs,for which local governments are primarily responsible, as well as wages too expensive," he added.
Basov noted that the popularity of German Chancellor Friedrich Merz and his government is simultaneously breaking negative records.
"In particular, only 23% of Germans approve of the Chancellor's performance, according to a survey conducted by the Forsa Institute for the NTV and RTL television channels. Isn't this also evidence of the country's economic situation?" the expert noted.