Federal and state governments have agreed on a new rule to relieve municipalities. The federal government will cover 80 percent of the costs for certain federal laws in the future.
After a long dispute, Lower Saxony's Minister President Olaf Lies announced the agreement on Wednesday evening. It follows the principle "Whoever orders, pays" and is set to take effect on September 1.
Chancellor Friedrich Merz spoke of a new chapter in cooperation. For new benefit laws or changes with additional costs exceeding 200 million euros for states and municipalities, the federal government covers 80 percent.
This mainly affects laws such as the Federal Participation Act, child and youth welfare, and advance maintenance payments. Costs for municipalities had risen sharply in recent years.
