The city is preparing for financial losses from the corona pandemic. Treasurer Christoph Frey (SPD) speaks of three scenarios. In the best case, the city treasury would lack 700 million euros.
- The Corona crisis presents the city of Munich with major financial challenges.
- Many hundreds of millions of euros are likely to be missing from the cash register - and only supposedly in the best case.
- City Treasurer Christoph Frey (SPD) is preparing for three possible scenarios .
Munich - The FDP had previously requested a statement from the chamberlain in a rush, the liberals even spoke of a possible budget freeze . The city would simply not spend the budgeted expenses. Contractually binding expenditure would be excluded.
At the present time, however, it is already not legally possible to issue a budget freeze, said Frey. The budget for 2020 is currently with the government of Upper Bavaria as the approval authority. Only when the budget is approved can you put a lock on it. "The new city council will have to deal with this," said Frey.
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The treasurer admitted that due to the corona pandemic, conventional planning, which is generally based on forecasts, tax estimates and assessments by economic researchers, is currently simply not possible. "We don't know when which restrictions will be lifted and what consequences they will have for the economy," said Frey. "We have to accept that."
The treasurer is preparing for three possible scenarios. Even the cheapest case, the loss of 700 million euros , would hurt the city. As is well known, the treasurer calculates an administrative surplus of EUR 222 million for the coming year. The amount had already shrunk to 187 million euros due to interim payments. “We assume that this will have an impact on solvency. However, this is guaranteed for the year 2020. ”However, only via new loans, the new city council must also decide which projects are absolutely necessary and which are nonchalant.
In another scenario, the city calculates a loss of one billion in trade tax and 150 million in income tax . In the worst case, the income from trade tax would be more than halved, there is talk of 1.5 billion . The loss in the participation from income tax would be 200 million euros. "What we will need in any case is an expansion of the credit line," said Frey. Up to now it was 95 million euros, but it could have been repaid immediately.
Combing Munich: New working group launched because of Corona
There are items on the expenditure side that cannot be addressed, for example in school expansion. “After all, we can't leave a half-finished building standing.” Although designs can be debated, these expenses have not yet had a direct impact on the budget. And simply postponing investments could also be counterproductive, since any savings would be consumed by the increase in the construction price index.
As an aid measure, the combing department now wants to set up working groups on profitability, which will examine individual projects across all departments for potential savings.
Many innkeepers are looking forward to starting the beer gardens soon. Some in Munich are already working on concrete plans for the time after the corona lockdown.