Germany’s fiscal problems are no longer confined to Berlin — they are now most visible in the country’s towns and cities, where local governments have recorded their worst deficit since reunification.
According to a DeStatis press release on Tuesday, municipal finances deteriorated sharply in 2025, with the deficit climbing to €31.9 billion, up from €24.8 billion the previous year. While revenues rose to €391.4 billion, an increase of 4.1 percent, spending grew even faster to €423.3 billion, widening the gap between income and expenditure to unprecedented levels.
